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Government-controlled mortgage company Fannie Mae says its second-quarter loss attributable to shareholders widened as it continues to seek out loan modifications to help lower defaults amid the ongoing difficulties in the housing and mortgage markets.

Fannie Mae lost $5.18 billion, or 90 cents per share, for the period ended June 30. That compares with a loss of $3.13 billion, or 55 cents per share, a year earlier.

The quarter included $6.1 billion in credit-related expenses tied to its pre-2009 book of loans cash advance now. Fannie Mae said Friday that it aims to lower its credit losses while keeping as many families as possible in their homes.

The period’s results also included $2.3 billion in dividend payments to the U.S. Treasury.

Revenue climbed to $5.24 billion from $4.5 billion.

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A confused cockpit crew without proper training to head off high-altitude disaster flew toward it, instead, with wrong-headed maneuvers, no task-sharing and perhaps unaware their flight was about to end in the Atlantic Ocean.

Screeching stall alarms and incoherent speed readings from faulty sensors, bad weather in a darkened sky and growing stress make up the chaotic cockpit scenario in the final moments of the Air France flight from Rio de Janeiro to Paris on June 1, 2009. All 228 people aboard the plane were killed.

Friday’s third report by France’s accident investigation agency, or BEA, lays out almost second-by-second technical data on the flight’s deadly trajectory but cannot answer the ultimate question _ whether pilot error, equipment failure or other still unknown factors caused the crash.

The BEA’s findings raised worrisome questions about the reactions of the cockpit crew _ two co-pilots _ as the A330 went into an aerodynamic stall and their ability to fly the A330 manually as the autopilot disengaged. The report expressed broader concern about the state of training of today’s pilots flying high-tech planes when confronted with a high-altitude crisis.

BEA officials said they are bringing together a bevy of experts, from psychologists to physiologists, to try to reconstitute the scene from the crews’ point of view _ the human factor which could include potential disorientation. Those findings would be included in the final report expected early next year.

Many of the crews’ actions “seem contrary to logic and we’re seeking rational explanations,” chief BEA investigator Alain Bouillard told a news conference, adding that the cockpit crew even seemed unaware the plane had gone into an aerodynamic stall.

“We understood how the accident came about,” Bouillard said. “Now we must learn why it came about.”

Friday’s 117-page report, based on a full reading and analysis of the flight and data recorders dredged from the ocean depths, recommends mandatory training for all pilots to help them fly planes manually and recover from a high-altitude stall.

With the captain of Flight AF447 on a rest break, the report also expressed concern over “non-optimal task sharing” between the two co-pilots. Among the BEA’s 10 recommendations, it wants authorities to further define criteria for appointing a relief captain to ensure better synergy among relief crews.

When the captain of the Air France flight returned in the midst of the crisis, “neither of the two co-pilots gave a precise accounting of the problems encountered nor of actions undertaken, except that they had lost control of the plane and that they had tried everything,” the report said.

The captain had “implicitly” appointed the younger co-pilot as his relief before taking his regulation nap.

Experts caution against laying blame on the pilots _ all experienced and qualified to fly the aircraft.

“The information they’re getting from the brain of the airplane, the thing that they’ve been trained to trust, is sending them all off on tangents,” said John Goglia, a former U.S. National Transportation Safety Board member and an expert on airline safety.

“They’ve got bells and whistles going off, they’ve got a face full of lights,” Goglia said. And yet, “the pilots had an awful lot of information denied to them to help them deal with the situation” because of malfunctioning computers.

The crew had less than 4.5 minutes to act to correct an aircraft that was sounding alarms and giving sometimes false readings. However, BEA chief Jean-Paul Troadic said that, at the start at least, “the situation was salvageable.”

The chilling scenario as described by the voice and data recorders began at 2 hours, 10 minutes and 5 seconds into the overnight flight, when the autopilot and auto-thrust disengaged and a stall warning sounded twice in a row. The recordings end at 2 hours, 14 minutes and 28 seconds.

The co-pilot designated by the captain quickly took over manual controls of the aircraft, and nosed the plane upward _ the opposite of what was needed to give the plane lift.

A basic maneuver for stall recovery, which pilots are taught at the outset of their flight training, is to push the yoke forward and apply full throttle to lower the nose of the plane and build up speed. But he nosed up throughout much of the impending disaster and the plane reached a maximum height of 38,000 feet.

The report confirms that external speed sensors obstructed by ice crystals produced irregular speed readings on the plane. Since the accident, Air France has replaced the speed monitors on all its Airbus A330 and A340 aircraft.

The BEA’s report noted that Airbus warned pilots in 2008 that incorrect speed readings from the Pitot tubes could cause erroneous stall warnings. But Bouillard, the chief investigator, maintained that the pilots should “always respect a stall warning.”

Passengers, finishing dinner or napping, were never advised of the plane’s plight.

“From what we’ve been told, nobody realized what was going on. On that level, for my mental and moral comfort I am very pleased to hear this, when you know you had two people on board who were dear to you,” said Corinne Soulas, whose 24-year-old daughter Caroline and son-in-law were aboard the flight.

The alarms _ computer-generated voices screeching “stall … stall … stall” sounded numerous times, and once for a full 54 seconds.

Incomprehension and growing tension ensued.

At an alarm sound, the co-pilot not flying said at one point “What’s that about?” Curiously, the crew made no reference in cockpit exchanges to the warnings, the report said.

As described by the BEA report, several calls were made to the captain. The pilot not flying expressed concern several times at the captain’s absence, a concern that “probably raised the stress level of (that) pilot as he faces a situation he doesn’t understand.”

The flying pilot twice said he had lost control of the plane. Then, 27 seconds later the pilot not flying takes control but the designated pilot retakes control “almost immediately without any announcement.”

A minute and a half later, the captain arrived, but with no pertinent information from the co-pilots and a lack of information from the control panel he appears not fully aware of the situation _ and did not ask questions to better understand.

The report said that “multiple stops and reactivation (of the alarm) probably added to the confusion and disturbed his diagnosis of the situation.”

There has been a silent tug-of-war between Air France and Airbus, the plane’s constructor, over the crash.

Both were charged last March with involuntary homicide following the accident.

In a statement, Air France said there was currently no reason to question the crew’s technical skills. The airline said the report showed that a series of unlikely failures led to the stall and crash.

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Recent spills in China’s largest offshore oil field are being investigated, reports say.

The spills were in the Bohai Penglai 19-3 oil field in Bohai Bay off the northeast coast, said reports in the Southern Weekend and other newspapers. The field is a joint venture between China National Offshore Oil Corp. and ConocoPhillips China.

The State Oceanic Administration is investigating the spills and will announce results later this month, the reports said.

Calls to CNOOC, ConocoPhillips China and to the State Oceanic Administration rang unanswered on Friday. Inquiries to the Shandong Provincial Oceanic and Fishery Information Network likewise were not answered.

The first spill occurred around June 10 about 38 kilometers (25 miles) off the coast of Shandong province and was cleaned up in a few days free business cards. Another spill earlier this week and was likewise contained relatively quickly, the reports said.

It was unclear what caused the spills, how many had occurred or if they were continuing.

China’s worst reported oil spill occurred nearly a year ago, when a pipeline at Dalian, a busy northeastern port, exploded and oil poured into the sea, spreading over at least 165 square miles (430 square kilometers).

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A cheaper source of fuel, a dedicated sales team and workforce, and an investment in a tissue machine will help the last paper mill in New Hampshire’s North Country succeed, state and mill industry representatives say.

The changes come to the mill in Gorham as the papermaking industry fights growing competition from overseas plants in recent years. Some mills in northern New England have had staying power because they have developed business in specialized papers. Others have had to contend with rising oil costs to run the plants and a loss in demand as email and the Internet have replaced the need for some types of paper.

The Gorham mill, shut down for eight months but newly acquired by a New York private equity firm, is scheduled to reopen Wednesday with the startup of its paper towel machine and at least 70 of its approximately 240 workers called back. The plans are to add more staff and operations in July.

“They’re concentrating on areas that they can be strong on, that there’s a little bit less competition _ towel and tissue is a little bit more difficult to, let’s say, import from Asia and make it feasible,” said George Bald, commissioner of New Hampshire’s Department of Resources and Economic Development. “I just know that they are sharp people, they have been successful and they want to show that they can make this a very good success as well,” he said of Patriarch Partners, led by CEO Lynn Tilton.

Tilton, whose firm specializes in buying distressed manufacturing businesses and bringing them back to life, recently met with the mill workers and state and local officials who worked on finding a buyer after the last owner, Fraser Papers, declared bankruptcy in 2009.

“If I can show America a fairy tale of business owner and worker _ and government and business _ coming together to rebuild our country, then others will do it,” Tilton told the crowd. “It will take all of us to do it.”

Tilton plans to spend the money to convert the mill’s fuel source from oil to gas in about five months. “It’s a must,” she said. The gas line has been secured that would supply power to the mill from a landfill.

She said the largest investment will be a tissue machine, “so we can battle against foreign imports.” She estimated it would take about a year to build the machine and get it operating.

Tilton said one reason she took interest in Gorham was because Patriarch had bought the Old Town Fuel & Fiber mill in Maine a few years ago, the firm’s first mill venture.

Old Town’s owner had filed for bankruptcy. The mill had been selling pulp to customers such as the Gorham mill, but also was researching the development of biofuels.

“We got the mill back up and running, we put all the workers back to work, we were able to make money and we’re building a biorefinery,” Tilton said. “We’re going to be the first to make jet fuel out of wood on a mill level credit reports free. Everybody, every day is proud of the work we do together. So that is what gave me the inspiration to be here.”

Maine has about 10 paper mills and still is regarded as the No. 2 papermaking state by volume, behind Wisconsin, said John Williams, president of the Maine Pulp & Paper Association, a trade group. Some have succeeded in making coated papers for magazines and catalogs, and in tissue production. They have been able to hire more staff. Others, such as two Katahdin region paper mills that closed, struggled to find alternative fuel sources and cope with decreasing demand for certain products.

“The hope is someone will come in and buy those mills,” he said. Talks have been going on between the state and possible investors.

New Hampshire has seen a steady decline in paper mill jobs. Dennis Delay, an economist with the New Hampshire Center for Public Policy Studies, said New Hampshire had about 7,000 jobs in the paper industry until the mid-1970s, but then the decline started. “We were down to 4,000 jobs in paper by 2000, and dropped to 1,400 jobs in paper by 2009,” he said.

Northern New Hampshire, once populated by about a half-dozen paper mills, has seen them all close, the most recent being pulp and paper mills in Berlin and Groveton.

“Pulp is very, very competitive _ that again is coming from South America and Asia,” Bald said. The mills also were selling specialty papers, such as for financial reports, but the demand for that had lessened. “Unfortunately, those things a lot of people now get by email,” he said.

One mill that has had staying power in New Hampshire is Monadnock Paper Mills in Bennington. It’s been running since 1819.

Company CEO Richard Verney, whose family bought the business in 1948, talked about strategizing going as far back as the late 1960s and early 1970s: “We tried to find relatively small niche markets where we thought we could provide a product that had value and we keep at that. It’s a continual process of trying to find specialty markets as opposed to commodity markets.”

He said a lot of products have started out as specialties, such as disposable diapers, when many families were using cloth ones. Then as the volume grew, they became commodities. “You wouldn’t think of not using them,” he said.

Verney, whose mill employs about 150 workers and makes high-quality, uncoated printing papers and some coated papers for wallpaper and sandpaper backings, suggested that Gorham, too, would have to find markets for higher values than they presently manufacture for.

“You have to stay at it, and products that we’re making today a few years down the road, we won’t be making,” Verney said.

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A round of confidence-building corporate deals in the U.S. helped lift Asian stock markets Tuesday, despite China’s inflation rate jumping to a near three-year high.

Oil prices hovered around $97 a barrel after a drop in Greece’s credit rating added to concerns about more debt and fiscal problems in Europe. The dollar was slightly lower against the euro and up slightly against the yen.

Japan’s Nikkei 225 index rose 1.2 percent to 9,559.80. Tokyo Electric Power Co., the embattled Japanese utility known as TEPCO, soared 18.6 percent after announcing it had begun testing a new radioactive water treatment system at its troubled Fukushima Daiichi nuclear power plant. TEPCO has been struggling to get control of a radiation leak at the plant since it was crippled by an earthquake and tsunami on March 11.

Sliding oil prices sent energy shares lower. Hong Kong-listed PetroChina Ltd., the publicly traded unit of China’s biggest oil and gas company, slipped 0.7 percent. China National Offshore Oil Corp., known as CNOOC, lost 1.2 percent.

South Korea’s Kospi rose 1.2 percent to 2,074.39. Among most active shares was Hynix Semiconductor, a world leader in memory chip production, rose 0.8 percent. Samsung Electronics, the top global manufacturer of flat screen televisions, memory chips and liquid crystal displays, rose 1.9 percent.

Gains were capped, however, due to worries about the U.S. economy and concerns that Europe’s fiscal crisis will worsen. On Monday, Standard & Poor’s cut Greece’s credit rating to CCC, two notches above default. S&P also said it doubts Greece will be able to sell bonds to finance its budgets in 2012.

Hong Kong’s Hang Seng rose nearly 0.1 percent to 22,529.87 and Australia’s benchmark S&P/ASX 200 edged up narrowly to 4,566.30. Benchmarks in Singapore, Taiwan and Thailand were also higher, while those in Indonesia and the Philippines dropped.

Shares in airlines, whose earnings benefit when fuel prices drop, were broadly higher payday loans. Hong Kong-listed China Eastern Airlines rose 3.2 percent. Korean Air Lines Co. was 1.2 percent higher, while Taiwan’s EVA Airways Corp. gained 1.1 percent.

Mainland China’s Shanghai Composite Index rose 0.9 percent to 2,723.67, and the smaller Shenzhen Composite Index added 1.2 percent to 1,124.16.

China’s National Statistics bureau said Tuesday that consumer prices rose 5.5 percent over a year earlier in May, driven by an 11.7 percent jump in food costs. That was up from April’s 5.3 percent rate and exceeded March’s 32-month high of 5.4 percent.

The figure was in line with forecasts and didn’t rattle trading.

On Wall Street on Monday, a round of corporate deals spurred confidence and helped eke out a day of gains.

Wendy’s/Arby’s Group Inc. rose nearly 1 percent after the company said it would sell control of its Arby’s restaurant business to a private equity firm that owns several other quick-service franchises, including Moe’s Southwest Grill and Auntie Anne’s. And clothing maker VF Corp., whose brands include Wrangler and The North Face, jumped 10 percent after agreeing to buy the boot maker Timberland for more than $2.2 billion.

The Dow Jones industrial average gained less than 0.1 percent to close at 11,952.97. The Standard and Poor’s 500 inched up less than 0.1 percent to 1,271.83. The Nasdaq composite lost 0.2 percent to 2,639.69

Benchmark crude for July delivery was down 8 cents to $97.22 in electronic trading on the New York Mercantile Exchange. The contract dropped $1.99 to settle at $97.30 on Monday.

In currencies, the euro rose to $1.4416 from $1.4412 late Monday in New York. The dollar strengthened slightly to 80.21 yen from 80.19 yen.

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Gambling stock investors take what they can get.

Recent revenue gains in the Las Vegas gaming business have been a plus as it awakens from a recession hangover. However, the results do pale in comparison with the record-setting pace of China’s Macau administrative region, which has become the world’s gambling capital.

But a gain is still a gain.

“The gaming industry is doing fine and there has been improvement in its stock prices, which is the function of a slowly improving consumer,” said Steve Ruggiero, gaming analyst with CRT Capital Group in Stamford, Conn. “Recession made gaming companies disciplined in their costs, and I think 2012 will have rational marketing and show steady improvement right along with the consumer.”

Because spending on gambling is dependent on a number of factors that include convention business, it tends to lag behind the economy, and Las Vegas has suffered greatly, Ruggiero explained. Despite improvement in the city’s business this year, it is heading into a seasonally slower period that is especially vulnerable to gasoline prices because so many customers drive their cars in from California.

“The U.S. gaming market is coming out of its trough levels from the depths of recession, with the revenue reports from casinos to the Nevada Gaming Commission showing a 5.1 percent increase in the first quarter,” said Conley Turner, gaming analyst with Wall Street Strategies in New York.

Throughout the U.S. there are 23 states with similar reporting, and they’re showing about a 5 percent improvement as well, he added, which is not great but still a “meaningful improvement” and a positive sign.

Meanwhile, gambling revenue in Macau increased 42 percent in May from a year ago, Chinese government statistics indicate, bringing its revenue to a record high for the fourth month in a row. Macau gambling officials have predicted a 20 percent increase in casino revenue for this year.

A rising Chinese middle class and plenty of high rollers make Macau an attractive casino location.

“Chinese gamblers tend to gamble a lot more than U.S. gamblers, betting about four times more per hand than U.S. folks, so there’s just much bigger potential for U.S. companies in Macau,” explained Chad Mollman, gaming analyst with Morningstar Inc. in Chicago. “Investors in this sector should look at companies with exposure in Macau and keep an eye on the stock valuations.”

There are about 200 million people within a two-hour plane ride to Macau, noted Turner. Gamblers tend to go to Macau a couple of times a month, while U.S. gamblers usually go to Las Vegas only a couple of times a year, he noted.

“Macau surpassed Las Vegas in terms of revenue about three years ago and shows no signs of stopping,” Turner said. “Investors

China ranks first among 22 emerging Asian economies as the country most likely to maintain steady and rapid growth over the next five years, according to the Bloomberg Economic Momentum Index for Developing Asia.

China scored 76.2 percent in a ranking of 16 areas including economic competition, education level, urban migration, high-technology exports and inflation that measure a country’s ability to continue delivering high growth. India was second with a score of 64.1 percent followed by Vietnam at 61.9 percent. Timor-Leste was last at 25.3 percent.

The index suggests China and India’s economic surge is durable and will likely continue to drive global growth as the U.S., Europe and Japan lag behind. China eclipsed Japan last year as the world’s second-largest economy.

“I am not surprised that China comes out on top on this metric, and China probably should be placed on top among emerging Asian economies,” said Victor Shih, a professor who studies China’s financial system at Northwestern University in Evanston, Illinois.

In the past 30 years, China’s economy has expanded on average by 10 percent a year as it overhauled state-owned companies and allowed more foreign investment. Among economies with annual gross domestic product above $1 trillion, India posted the second-highest growth rate after China last year, expanding by 8.2 percent in the last quarter of 2010.

The Organization for Economic Cooperation and Development forecasts U.S. economic growth of 2.6 percent this year, 2 percent for the eurozone and a 0.9 percent contraction for Japan.

China Shocks

Shih said the measure may overstate China’s rank relative to India’s and other countries, in part because Chinese official figures understate debt levels payday loans guaranteed no fax.

China could face economic and political shocks that would impact on its growth. Fitch Ratings said in March that China faced a 60 percent chance of a banking crisis by mid-2013 in the aftermath of record lending and surging property prices. Strikes, riots and protests are also on the rise, doubling in five years to 180,000 incidents last year, according to Sun Liping, a sociology professor at Beijing’s Tsinghua University.

The index put some countries with among the world’s highest growth rates in the past several decades, including Malaysia and Thailand, behind such countries as Vietnam, which ranked third, and Bangladesh, which ranked fifth.

Equity Markets

The index gives weightings of 10 percent each to four categories: the competitiveness of market structure, which rewards countries for having fewer big companies that dominate equity markets; the quality of the labor force, including education levels, the age of the work force, and the growth rate of scientific journal publications; gross national savings as a percentage of GDP; and the growth of high-technology exports.

A further 12 areas have 5 percent weightings, including growth in GDP per capita adjusted for the cost of living, growth in world share of GDP, stability of inflation rates, diversity of top trading partners, external and public debt burdens, lending costs, net foreign direct investment and deforestation. Four “cohesiveness factors” include ethnic and religious homogeneity, income equality, rates of urbanization and poverty reduction, and variation in the jobless rate.

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An ex-car racing boss who sued a tabloid over a story about his sadomasochistic orgy with dominatrixes lost his privacy case Tuesday in the European Court of Human Rights _ a ruling applauded by free speech advocates.

Max Mosley won a lawsuit against Britain’s News of the World tabloid for its 2008 front-page story claiming he, the president of the governing body overseeing Formula One racing, had an hours-long Nazi-themed orgy with five women. Mosley, the son of a former fascist leader, acknowledged the orgy but denied the Nazi theme.

Despite winning sizable damages and legal costs, Mosley didn’t stop fighting.

He then took the case to the European court in France, which can intervene in British court rulings. Mosley claimed that his privacy rights, which are protected by the European Convention on Human Rights, should force news organizations to notify subjects before publishing details about their private lives.

But the court disagreed, saying European law didn’t require pre-notification and that such a requirement could have a chilling effect on freedom of speech.

“I am disappointed at today’s judgment, because I think that there is widespread recognition that privacy is fundamental to the way we live our lives,” said Mosley, who plans to ask the court’s grand chamber in Strasbourg to reconsider its decision.

But free speech advocates were heartened.

“This is very welcome news for the media,” said lawyer Robin Shaw. “The obligation to give prior notification would not have been restricted to stories about the sexual behavior of people in the public eye, such as Mr. Mosley, but would potentially have embraced any story about an individual, however seemingly innocuous.”

Privacy has become the latest buzz word in Britain, where scores of celebrities and sports figures have been granted recent injunctions or gag orders to prevent media from publishing the details of their extramarital affairs.

But those very injunctions became obsolete this week when a Twitter user made an anonymous post naming many of the men who were granted the gag orders, including a married soccer star who allegedly had a fling with a topless model and a well-known married British actor who had sex with a prostitute.

U.S.-registered sites are largely exempt from British gag orders because they fall outside the court’s jurisdiction.

Freedom of speech in the United States is protected under the First Amendment and often trumps privacy arguments. European law protects both privacy and freedom of expression, but it is often left to interpretation by judges.

In Britain, the parents of Prince William’s new bride, Kate Middleton, also recently complained to the Press Complaints Commission after tabloids published photos of Kate and her sister Pippa Middleton wearing bikinis off the coast of the Spanish island of Ibiza.

In Britain, more than 30 public figures have won gag orders since 2008. In France, too, privacy is considered sacred, and editors there long shied away from reporting that former President Francois Mitterand had an illegitimate daughter.

But the questions go beyond privacy. Mosley said his tabloid sex tale offered little to no public interest value, but some say the same argument could have applied to Tiger Woods, whose image as a squeaky clean role model was tarnished after reports of widespread infidelities.

Had Mosley won, the ruling also could have also forced non-governmental organizations to warn people before publishing details of investigations.

The human rights group Global Witness, for example, was sued by the president of the Republic of Congo’s son in 2007, who wanted it to remove documents from their web site that showed he had been using state oil revenues to find his posh lifestyle. The group ultimately won the case and were awarded costs but it was a lengthy process. Had they been required to warn the son first, the details may have never come to light.

“What we have in Europe is a very broad interpretation of privacy, which has serious ramifications for freedom of speech,” said Jo Glanville of the London-based Index on Censorship.

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Cut spending by $6 trillion over the next decade. Lower the highest tax rate to 25%. Radically overhaul Medicare and Medicaid.

Paul Ryan is not messing around.

On Tuesday, the fiscal guru of the House GOP majority released his 2012 budget proposal — the first real indication of how House Republicans want to tackle the country’s long-term budget shortfalls.

Called "The Path to Prosperity," Ryan’s budget resolution is as much a political treatise as it is a fiscal blueprint.

"[This resolution] disavows the relentless government spending, taxing, and borrowing that are leading America, right at this moment, toward a debt-fueled economic crisis and the demise of America’s exceptional promise," the resolution reads.

Ryan put it more bluntly in a press conference. "This isn’t a budget. This is a cause."

In the near term the plan calls for $3.5 trillion in federal spending next year. That’s below the $3.7 trillion that President Obama requested, but on par with nominal federal spending in 2010.

It also estimates that $2.5 trillion in revenue will be raised, leaving a deficit of just under $1 trillion.

But over the course of the next decade and beyond, the House GOP resolution aims to reduce spending, taxes and debt.

Reducing deficits: Relative to accrued debt under the president’s 2012 budget request, the measure would reduce the debt by $4.4 trillion over 10 years, Ryan estimates. Relative to the more stringent CBO policy assumptions, it cuts the debt by roughly $1.7 trillion.

Nevertheless, the House GOP plan would still add $5.1 trillion to accrued deficits over the decade.

The House Budget Committee, however, estimates its plan would achieve balance — where revenue matches outlays — by the late 2030s.

Budget resolutions, it should be noted, are initial frameworks for a months-long budget process and are not subject to an official analysis or score by the by the nonpartisan Congressional Budget Office.

CBO often comes up with different cost-and-savings estimates than lawmakers because it measures the numbers off of a different base. For instance, the CBO counts tax cuts that are not "paid for" as adding to deficits, where the House GOP and to some extent Obama did not.

Reforming the tax code: The House GOP plan would reform the tax code without raising more money than the current system. It would reduce the number of income tax brackets, lower the top rate for individuals and corporations to 25% and eliminate many tax breaks.

The aim is to keep federal tax revenues between 18% and 19% of GDP — or near its 40-year average of 18.3%.

The president’s bipartisan fiscal commission and another highly regarded bipartisan commissions of outside experts also called for tax reform that would lower rates. But unlike the House GOP, their proposals raised more revenue than the current system and a portion of that added revenue is earmarked to reduce U.S. deficits.

Until tax reform is enacted, Ryan’s plan calls for the Bush-Obama tax cuts to remain in place for all taxpayers after 2012.

Putting the reins on spending: Ryan’s plan would reduce federal spending to below 20% of the economy by 2015. That would be below the 20.7% average over the past 40 years.

And it would slice non-security discretionary spending to below 2008 levels. Ryan said that goal would be achieved in numerous ways. Among them: reforming farm subsidies, shrinking the federal work force and targeting inefficiencies at the Pentagon.

Plus, the GOP plan would introduce "enforceable" caps on spending.

All told, the House Budget Committee estimates its plan would reduce spending over the next decade by roughly $6 trillion relative to both the president’s 2012 budget proposal and the CBO’s more stringent policy assumptions over the next decade.

Reforming Medicare and Medicaid: The House GOP proposes to make major structural changes to Medicare and Medicaid.

Spending on entitlements is one of the biggest drivers of the country’s future debt.

Starting in 2022, the House GOP resolution would convert Medicare — the health care program for seniors — into a voucher program, or what Ryan calls a "premium-support model."

Under such a system, seniors would choose from a Medicare-approved list of private insurance plans and the cost of their chosen plan would be subsidized in part by the federal government.

Wealthier seniors would receive less of a subsidy than everyone else.

"The open-ended, blank-check nature of the Medicare subsidy threatens the solvency of this critical program and creates inexcusable levels of waste," Ryan wrote Tuesday in a Wall Street Journal op-ed. "But because government should not force people to reorganize their lives, its reforms will not affect those in or near retirement in any way."

Critics of similar proposals contend, among other things, that they effectively privatize Medicare and may mean seniors no longer will be guaranteed a certain set of benefits as they are under the current fee-for-service system.

Under the House GOP proposal, Medicare would offer more assistance to lower income seniors for their out-of-pocket costs and would increase payments for those who are sick if their condition worsens. The eligibility requirements for such increasd assistance, however, were not clear.

The resolution would also convert the federal government’s payments for Medicaid — the health program for the poor and disabled — into a block grant to be allocated among states. Currently, federal payments to states are determined by a formula.

Putting kibosh on health reform: The resolution assumes the repeal and defunding of the 2010 health reform law, which both created new federal subsidies to help low- and moderate-income Americans buy insurance, expanded Medicaid and also instituted a large number measures aimed at creating cost-and-efficiency savings in the health care system.

For instance, the House GOP plan assumes the tax increases under the new health law — which the budget committee puts at $800 billion — are eliminated.

The fight ahead: Ryan’s budget proposal is expected to generate a full-throated debate about the nation’s long-term debt crisis — the solutions for which bitterly divide Democrats and Republicans.

At the same time, Congress has been unable to agree to a budget for the current fiscal year, which began six months ago.

For their part, House Republicans are still divided over the magnitude of spending cuts for this fiscal year. Some lawmakers are pointing to the 2012 budget as the place where Republicans can offer the kinds of major spending cuts and reforms that the newest and most conservative members are miffed they are not getting in the 2011 fight. 

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Police have arrested nine people, including two of Britain’s wealthiest entrepreneurs, on suspicion of fraud in connection with the 2008 collapse of Iceland’s Kaupthing bank during the global financial crisis.

Britain’s Serious Fraud Office said seven men aged between 42 and 54 were held in raids on two businesses and eight homes in London. The properties were being searched and the suspects questioned at police stations in the city. Two men, aged 42 and 43, were arrested in the Icelandic capital, Reykjavik.

Entrepreneurs Robert and Vincent Tchenguiz confirmed they were among those arrested in London and said they were “cooperating fully” with authorities.

A police van was parked outside the office of the brothers’ investment firm, Rotch Property, in the upmarket Mayfair area.

The Tchenguiz brothers amassed a large property portfolio and had investments in some of Britain’s best-known retail brands, including grocer J. Sainsbury PLC and pub chain Mitchells & Butlers.

But the business borrowed more than 1 billion pounds ($1.62 billion) from Kaupthing, and was plunged into crisis when the bank collapsed.

Icelandic media said former Kaupthing chairman Sigurdur Einarsson was also arrested in London.

Britain’s fraud office is investigating whether Kaupthing made false claims while trying to attract British investors to its “high yield” deposit account, Kaupthing Edge.

It is also looking at why “substantial value” was taken out of the bank shortly before it collapsed.

Iceland’s economy imploded when Kaupthing and the other major banks collapsed under the weight of huge debt in the early days of the world financial crisis.

Prosecutors have already made several arrests in Iceland as they investigate suspected market manipulation and fraud in the run-up to the banking crash.

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