Obama moves toward exit from Afghanistan (Reuters)

WASHINGTON (Reuters) – President Barack Obama was set to unveil on Wednesday his plan to start bringing U.S. troops home from Afghanistan in a significant first step toward ending a decade-long war that is increasingly unpopular in the United States.

Obama will announce in a televised address at 8 p.m. EDT (midnight GMT) a plan to pull out 10,000 troops from Afghanistan by year's end, followed by about 23,000 more by the end of next summer, congressional aides told Reuters.

News that Obama will pull the entire 'surge' force he sent to Afghanistan in 2010 caps weeks of speculation about the future of U.S. involvement there and could increase friction between Obama and military advisors who have warned about the perils of a hasty drawdown.

Nearly 10 years after the September 11 attacks that triggered the war, U.S. and NATO forces have been unable to deal a decisive blow to the insurgent Taliban. The Afghan government remains weak and notoriously corrupt and billions of dollars in foreign aid efforts have yielded meager results.

Obama's announcement comes the week after General David Petraeus, the outgoing commander of U.S. and NATO troops in Afghanistan, presented several options for drawing down some of the 100,000 U.S. soldiers there starting in July.

The president's decision appears to reflect the competing pressures he faces as he seeks to rein in government spending and halt American casualties without endangering the gains his commanders say they have made across southern Afghanistan.

The decision to withdraw the 33,000 troops by the end of the summer of 2012 is unlikely to sit well with the Pentagon's top brass. They worry that insurgents could regain lost territory and that fighting along Afghanistan's eastern border with Pakistan will intensify.

Outgoing Defense Secretary Robert Gates has said removing too many troops before the United States can prove it has turned a corner would be "premature.

Yet Obama also faces mounting demands from some quarters of the U.S. Congress, impatient with a war that now costs more than $110 billion a year, for a larger initial drawdown.

Even after the withdrawal of the 33,00 U.S. troops, about 70,000 will remain in Afghanistan by the autumn of 2012, more than were there when Obama took office.

SHIFT SINCE BIN LADEN'S DEATH

The debate in Washington has shifted palpably since U.S. special forces killed Osama bin Laden in Pakistan last month.

The al Qaeda leader's death has given critics from both parties ammunition to argue that the Obama administration must narrow U.S. goals in Afghanistan, which remains desperately poor and notoriously corrupt.

While the United States has embraced efforts to find a political settlement with the Taliban, officials acknowledge a peace deal may be far in the future even if one could be had.

Obama is mindful of the American public's lack of support for the war as he looks to his 2012 re-election campaign.

A Pew Research poll released on Tuesday found a record 56 percent of Americans favor bringing U.S. forces in Afghanistan home as quickly as possible.

Still, the situation on the ground in Afghanistan remains volatile and Obama will face heat from Republicans if he is seen as rushing toward the exit.

The Taliban has been pushed out of some areas of their southern heartland, but the insurgency has intensified along Afghanistan's eastern border with Pakistan.

July marks the official start of NATO's handover to local security forces in keeping with a plan to put Afghan soldiers in charge across the country by the end of 2014.

Serious doubts remain about whether Afghan forces, plagued by desertion and illiteracy, will be up to the task.

NATO PARTNERS ALSO ANXIOUS TO LEAVE

The White House decision may embolden European nations to withdraw their own troops more quickly from Afghanistan despite the Pentagon warnings.

Analysts said non-U.S. allies would want to follow the American lead quickly given the squeeze on their defense budgets, the demands of the war in Libya and the domestic unpopularity of the Afghan mission.

"I don't see how this ends in anything other than a run to the exit. I cannot think of one European country that wants to be in Afghanistan more than the Americans," said Tomas Valasek of the Center for European Reform in London.

The drawdown from Afghanistan underscores the Obama administration's shift toward a more explicit focus on Pakistan, the nuclear-armed nation where a weak government and powerful military are viewed with suspicion in Washington.

U.S. officials see an even bigger threat emanating from Pakistan, which was home to bin Laden and still a major base for militants targeting Americans.

Still, analysts have cautioned that if the United States walks away from Afghanistan, it does so at its own peril because of the risk the country could topple back into the grip of extremism or renewed civil war. Both of these scenarios could again open the door to al Qaeda.

"What will be important is what happens in two or three years from now," Valesek said. "If Obama gets re-elected, and it all goes wrong, and Kabul has turned into another Mogadishu -- then he would clearly have some explaining to do."

(Additional reporting by Susan Cornwell, Laura Macinnis, Phil Stewart and Alister Bull in Washington and David Brunnstrom in Brussels. Editing by Christopher Wilson)

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Consumer Spending Rises in March, Added Money Going Toward Gas

Associated Press

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WASHINGTON -- Consumers spent more in March, but most of the added money went toward higher gas prices. 

Retail sales increased 0.4 percent last month, the ninth consecutive gain, the Commerce Department reported Wednesday. The increase shrank to a slight 0.1 percent when sales at gasoline stations were excluded. 

The biggest decline in auto sales in more than a year also pulled down overall sales. When taking out sales at gas station and of autos, retail sales rose 0.6 percent. 

Economists are hoping that a payroll tax cut and brighter outlook for job growth will keep consumers shopping this year. Consumer spending accounts for 70 percent of economic activity. 

But analysts worry that the recent spike in energy prices will not leave shoppers with much left over to spend on other goods and services. The nationwide average for regular gasoline is now $3.80 a gallon, up from $3.56 a month ago, according to the motor club AAA. 

For March, sales of autos dropped a sharp 1.7 percent, the biggest decline since February 2010. 

However, some of the weakness was because General Motors scaled back incentive offers. 

Economists believe the outlook for auto sales for the rest of this year remains bright, given improving job prospects. 

Shoppers did spend 3.6 percent more at furniture stores. Sales were also rose at appliance stores and specialty clothing stores. Sales at general merchandise stores, the category that includes big retailers such as Wal-Mart, rose 0.4 percent. 

However, sales at just department stores such as Macy's saw a 0.2 percent drop in March. A survey of major retailers from Costco to Victoria's Secret had reported surprisingly good sales for March. Analysts said the gains would have been better but for the fact that Easter does not come until late April this year.

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Gadhafi forces push toward western gate

By Chris Hondros, Getty Images

Libyan rebels sit in the back of a truck on the western edge of Ajdabiyah as they tried to stop advances by pro-Gadhafi troops.

EnlargeCloseBy Chris Hondros, Getty Images

Libyan rebels sit in the back of a truck on the western edge of Ajdabiyah as they tried to stop advances by pro-Gadhafi troops.

The western gate had effectively become the new rebel front. Early Friday, fighters there said Gadhafi's forces were within 12 miles of the city. On Wednesday, they were at least 40 miles out.

Beyond the gate, only a few rebel trucks ventured forward on scouting missions. One was hit with gunfire 11 miles from the gate and a rebel was wounded.

In previous days, the western gate has been a hectic staging ground for scores of combat vehicles and hundreds of fighters preparing to drive the desert road to the front line.

The mood among the soldiers has often bordered on boisterous, marked by flag-waving and displays of bravado. On Friday, the gate was more sparsely guarded and more tense than usual.

Edgy rebels fired bursts of gunfire in the air and broke out into fistfights among themselves.

Gadhafi forces fired a salvo of mortars at the position around 3:30 p.m., blasting dirt and rocks about 200 yards away. The force panicked and fled, leaving behind only a handful of fighters who didn't jump into a speeding vehicle, repeating what has become a familiar pattern. The rebels tend to run when attacked rather than dig in and fight.

More explosions were heard around Ajdabiya later.

Ajdabiya was in rebel hands at the beginning of the revolution in mid-February, but was taken by Gadhafi forces a month later. United Nations-authorized airstrikes took out much of Gadhafi's defenses around the city and it has been under rebel control since late March.

For Gadhafi, Ajdabiya provides a critical link to Tobruk, an oil-rich coastal city. If Gadhafi were to connect those dots, it would tighten a noose around the rebel stronghold of Benghazi.

Late Friday, the rebels seemed to regroup. American photographer Nicole Tung, who stayed at the western gate until twilight, reported that a column of pickups mounted with heavy weapons advanced through the gate toward Gadhafi forces.

Rebel fighters told Tung they had reclaimed ground about 25 miles out, but that couldn't be independently verified.

Meanwhile, in the rebel stronghold of Benghazi in eastern Libya, angry crowds fired into the air and chanted against Gadhafi's regime as militiamen killed in the NATO airstrike were carried for burial.

"The martyrs' blood is not shed in vain!" cried some of the thousands of people gathered in central Benghazi to pray and mourn some of the dead from the attack on rebel tanks and vehicles.

The main clashes Friday between rebels and Gadhafi forces appeared to be in Misrata, where rebels want to retain a foothold in Gadhafi's territory and his government wants to consolidate control over the west with NATO airstrikes bearing down.

Heavy shelling was heard at nightfall outside the city, where some neighborhoods have been nearly abandoned after residents fled to safer areas during weeks of fighting.

Outside Ajdabiya, rebel fighters slapped peach-colored paint on their vehicles to try to distinguish from the pro-Gadhafi units.

"We are painting the trucks so NATO won't hit us," said Salam Salim, a 29-year-old rebel militiaman.

Tensions between the rebels and NATO were flaring even before the latest accident, with the fighters criticizing the alliance for doing too little to help them.

Last week, NATO took control over the international airstrikes that began March 19 as a U.S.-led mission. The airstrikes thwarted Gadhafi's efforts to crush the rebellion he has ruled for more than four decades, but the rebels remain outnumbered and outgunned and have had difficulty in making headway into government-held territory.

Contributing: The Associated Press

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Reid Warns Government 'Heading' Toward Shutdown

AP

Senate Majority Leader Harry Reid speaks to reporters on Capitol Hill April 5.

President Obama vowed Thursday to veto a Republican stopgap budget bill, a move that appeared to bolster a claim by Senate Majority Leader Harry Reid that the government "looks like it's heading" toward a shutdown without a deal on a six-month plan.

The White House issued a statement Thursday afternoon declaring that Obama would veto a GOP proposal to fund the government for one week while negotiations continue on a longer-term plan. Republicans have pitched the bill as the only option for keeping the government open past a Friday deadline, but its policy riders and $12 billion in cuts are not acceptable to Democrats. 

"This bill is a distraction from the real work that would bring us closer to a reasonable compromise for funding the remainder of fiscal year 2011," the White House said. 

Reid, speaking on the Senate floor Thursday morning, also predicted his chamber would reject Republicans' bill. "It's a fantasy," Reid said. "This is a non-starter in the Senate." 

The White House statement reiterated that the president could accept a "clean" short-term bill -- in other words, one that doesn't include so many cuts and doesn't include policy riders. House Democrats are looking to push such a bill later in the day. Obama also plans to meet with Reid and House Speaker John Boehner Thursday afternoon, the third such meeting in three days. 

But the options for averting a shutdown appeared to be quickly diminishing, as Republicans stood by their proposal and began to debate it on the floor. 

The only other alternative would be to strike a deal funding the government for the rest of the year by Friday. But that would take a breathtaking and unlikely amount of corner-cutting, considering there's only two days left, and Reid said the two sides can't agree on the contents of the package anyway. He slammed Republicans for policy riders targeting the EPA and abortion funding, saying he's much less optimistic about a deal than he was a day earlier. 

"The numbers are basically there," Reid said. "The only thing holding up an agreement is ideology." 

Lawmakers kicked the fingerpointing into high gear, with a shutdown on the horizon. 

Reid preemptively blamed Republicans, saying they wouldn't budge and calling their agenda "extreme." Senate Republican Leader Mitch McConnell pointed the finger right back, saying the Senate could still avert a shutdown by approving the one-week stopgap House Republicans plan to send over. 

"This is the only proposal out there that keeps the government open," McConnell said. "If a shutdown does occur, our Democratic friends have no one to blame but themselves."

"There's no policy reason for the Senate to oppose this bill," Boehner told reporters Thursday. Boehner spokesman Michael Steel also said there's "no agreement" on a number regarding a bill for the rest of the year. 

Boehner, in an earlier interview with ABC News' "Good Morning America," said he continues to fight for the largest possible cuts and that there is "no daylight between the Tea Party and me." The Republican stopgap bill would also fund the Pentagon for the remainder of the fiscal year that ends Sept. 30. 

A few on Capitol Hill showed glimmers of optimism amid the uncertainty. 

"How did you do in your brackets, by the way?" House Rules Committee Chairman David Dreier, R-Calif., asked Thursday before noting he didn't do so well on his college basketball picks. He said he's not going to apply the same approach to the budget. 

"I'm not going to make a prediction other than to say we've got a good chance to do it," Dreier told Fox News.

Even if a temporary measure is passed, Congress would be back at the same place a week from now, so the White House is making a renewed push to bring the two sides toward a longer-term compromise. 

Obama, after meeting earlier in the week with Reid and Boehner, summoned them again to the White House Wednesday night. They did not reach a deal, but Obama called the discussion "frank" and "constructive." 

"If we are serious about getting something done we should be able to complete a deal, get it passed and avert a shutdown," Obama told reporters in the White House briefing room. 

House Republicans originally passed a budget cutting $61 billion from last year's spending. Democrats have since proposed cutting $33 billion, and negotiators have recently toyed with the idea of bringing that number toward $40 billion.

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