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McCain defers campaign to work on economy

NEW YORK, Sept. 24 (UPI) -- Republican presidential candidate John McCain said he would suspend his campaign temporarily to return to Washington to deal with the financial crisis.

McCain told reporters in New York he would return to the nation's capital on Friday to try to fashion a response to the crisis in the U.S. markets. U.S. Treasury Secretary Henry Paulson has proposed a $700 billion bailout that has met resistance in Congress.

After meeting with his economic advisers and others to discuss the administration's proposal, McCain said "it has become clear ... that there is no consensus" to support the proposal.

He said he notified Barack Obama of his decision and urged the Democratic nominee to do the same.

"If we do not act, every corner of our country will be impacted. We cannot allow this to happen," McCain said.

The Arizona Republican called on President George Bush to meet with congressional leadership from both chambers, along with Obama and himself on the matter.

"It's time for both parties to come together on this problem," McCain said. "We must meet until this crisis is resolved."

McCain said he also asked the Commission on Presidential Debates to delay Friday's debate between the two presidential candidates.

Campaign officials said Obama did not plan to suspend his campaign, CNN reported.

Aides to Obama told CNN that the Democratic candidate contacted the McCain camp Wednesday morning about the two candidates issuing a joint statement about principles they thought were necessary for any bailout plan.

White House spokeswoman Dana Perino said the administration welcomed McCain's announcement and and would welcome both candidates to work on the bailout measure in a bipartisan manner.

McCain aide's firm paid by Freddie Mac

WASHINGTON, Sept. 24 (UPI) -- The firm of a top aide to John McCain received payments from troubled Freddie Mac, two people with knowledge about the situation said.

The disclosure that McCain campaign manager Rick Davis received $15,000 a month from the end of 2005 through August undermines a remark by the Republican presidential candidate that Davis wasn't involved with the company -- one of the institutions at the heart of the financial crisis -- for several years, The New York Times reported Wednesday.

Davis's firm, Davis Manafort, received the payments from the Freddie Mac, or Federal Home Loan Mortgage Corp., until it was taken over by the U.S. government, along with Fannie Mae, Federal National Mortgage Association, whose shaky finances precipitated the Wall Street chaos, sources told the Times.

Davis took a leave from Davis Manafort for the campaign, but still benefits from Davis Manafort as an equity holder, the Times said.

The disclosure came as McCain and Democratic challenger Barack Obama spar over each other's ties to lobbyists and special interests.

McCain spokeswoman Jill Hazelbaker didn't dispute the payments to Davis's firm but said Davis had stopped drawing a salary from the firm at the end of 2006 and his work did not affect McCain.

Iraq reaches compromise on elections

BAGHDAD, Sept. 24 (UPI) -- Iraq's parliament has reached an agreement to proceed with long-sought provincial elections after forging a compromise on the disputed city of Kirkuk.

A compromise will allow parliament to deal separately with oil-rich Kirkuk, which is claimed by Kurdish, Sunni Arab and Turkman interests, the BBC reported Wednesday.

Under the deal, provincial elections seen as crucial to a larger goal of political reform and national reconciliation in Iraq can go ahead in other parts of the country, analysts told the broadcaster.

"We tell our brothers in the south, the center of Iraq and Kurdistan, that this is an achievement by parliament," Bahaa al-Araji, head of the Iraqi parliament's legal committee, told reporters. "The elections will be soon, so the people of Iraq can put forward their votes to select new local government."

Kirkuk has been a flashpoint because Iraqi Kurds believe they should control the city, even though it lies outside its semi-autonomous northern enclave. Former President Saddam Hussein conducted a policy of "Arabization" there to claim its oil wealth, the BBC said.

Gates: Coalition in 'endgame' in Iraq

WASHINGTON, Sept. 24 (UPI) -- Decisions on the future of U.S. troops in Iraq are critical to the region's security and U.S. national security, Defense Secretary Robert Gates said.

Gates told the Senate Armed Service Committee coalition forces reached the "endgame" in Iraq, noting an 80 percent drop in violence and more withdrawals of U.S. forces in Iraq in sight, the Armed Forces news service reported.

Gates cautioned that serious challenges remain, including the failure of Iraq's parliament to pass an election law, which could increase the possibility of politically motivated violence.

"Our military commanders do not yet believe our gains are necessarily enduring, and they believe that there are still many challenges and the potential for reversals in the future," he said.

The situation in Iraq remains fragile, Gates said, but has improved since early 2007 when he became Pentagon chief.

"When I entered office, the main concern was to halt and reverse the spiraling violence in order to prevent a strategic calamity for the United States and allow the Iraqis to make progress on the political, economic and security fronts," he said.

Because of the situation now, "I believe we have now entered that endgame and our decisions today and in the months ahead will be critical to regional stability and our national security interests for years to come," Gates said.

Pakistan claims drone wreckage found

ISLAMABAD, Pakistan, Sept. 24 (UPI) -- Pakistani officials said Wednesday they have found the wreckage of a downed U.S. drone inside the country, but U.S. officials denied the report.

Pakistani security forces said the wreckage was found Tuesday night at a village in the border region of South Waziristan, a northwestern tribal area known as a staging area for al-Qaida and Taliban attacks inside neighboring Afghanistan, CNN reported.

U.S. officials disputed the drone report, however.

"We have had queries both yesterday and today about what you're talking about, but we have no reports of a downed plane," military spokesman Capt. Scott Miller told the broadcaster.

The issue of U.S. drones entering Pakistan to target militants is a contentious one in Islamabad where it is seen as a challenge to the nation's sovereignty. Feelings were inflamed this month when the U.S. military sent ground forces into South Waziristan without Islamabad's permission, CNN reported.

Houston power restoration still patchy

HOUSTON, Sept. 24 (UPI) -- Eleven days after Hurricane Ike, power restoration efforts have divided the Houston into a patchwork of areas with and without electricity, residents say.

In some cases, homes and businesses with power sit next door to those without, and some sweltering residents are reaching the limits of the endurance, The Houston Chronicle reported Wednesday.

"Every day's the same," former cashier Madelaine Carter, 60, told the newspaper. "You sweat. You hate everyone. After this long, you lose your good feelings, and you just want to knock somebody in the head."

The spotty nature of the power restoration was illustrated at one Houston apartment where 12 of the buildings had electricity and six did not, the newspaper reported.

"Every day we think, 'Maybe today's the day!' And then the evening comes and we say, 'It's not coming,' and we get so sad," Houston resident Priscilla Pearson, 48, said.

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