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Small-business measure faces test in Senate

WASHINGTON (Reuters) – Democrats in the Senate are mounting a final push to help small businesses and boost employment on Tuesday, less than two months before they face voters who believe they have not done enough to boost the struggling economy.

In a series of votes starting around 11 a.m. EDT, Senate Democrats hope to muster the 60 votes they need to overcome a Republican procedural hurdle and move toward a final vote. Democrats picked up crucial support last week when Republican Senator George Voinovich said he would break with his party and back the bill.

The House of Representatives has backed a version of the bill previously.

The bill, which includes $12 billion in tax breaks and a $30 billion lending fund, represents one of the Democrats' final chances before the November 2 elections to show voters they are working to improve the economy.

If the bill clears Congress, it would be a rare victory on the job-creation front for Democrats who have seen many of their other efforts blocked by Republicans this year.

Democrats estimate the measure could create 500,000 new jobs. Some 8 million jobs have been lost since the worst recession in 70 years began in late 2007.

Republicans have called the proposal a junior version of the government's controversial bailout of Wall Street.

With the unemployment rate stuck at 9.6 percent, Republicans are poised to rack up big gains in the November elections, possibly winning control of the House and the Senate, due in part to public perceptions that Democrats have not done enough to create jobs.

The bill would create a $30 billion fund that the government would invest in independent community banks to encourage lending to small firms. It would also exclude all capital gains on sale of small business stock from taxes. and ease tax rules for expensing and depreciation of equipment.

Industry groups back the bill.

Smaller firms have complained that they have had trouble getting loans to expand following the 2007-2009 financial crisis, when many banks pulled back their lending activity.

"Small businesses are the engine that drive our economy and they need help," Democratic Leader Harry Reid said in remarks on the Senate floor.

The U.S. government's definition of what constitutes a "small business" varies by sector, but typically encompasses firms that employ fewer than 500 workers or take in less than $7 million in annual revenues.

Republicans hope to modify the bill to ease tax-reporting requirements included in the landmark healthcare-reform bill passed earlier this year, but Democrats are expected to oppose that proposal.

(Editing by Leslie Adler)

HP Exec: More Palm WebOS Devices Coming

Famously plain-spoken HP executive Rahul Sood asked Palm WebOS fans for more patience Tuesday in awhere he pledged that "over the next 12 months we will see the makings of a new portfolio and the beginning of something great again."

Palm's new devices will have "new form factors," Sood added.

Sood was responding to a slew of Twitter and press queries around the future of Palm's WebOS, which has been in question since . After acquiring Palm, HP sent several conflicting messages: first, Palm's chief executive Jon Rubinstein said HP would "" on WebOS. Thensaid he was , after which the company said that both .

Hurd was recently ousted in aand is now attempting towhile being .

While Sood's title of "CTO, Global Gaming" doesn't directly address Palm, he's been engaging the WebOS community more tightly than any other Palm executive.

"HP Palm is working on both smartphones and other Web-connected devices … HP Palm is committed to delivering WebOS on a wide range of devices," he wrote in the blog post.

Sood's "keep the faith" message, though, was short on details. Recently we've seen details ofand heard about a potential , but Palm's newest product in the marketplace is still the nine-month-old .

"I'm confident that even the defectors of the WebOS community will be back once they see the breadth of product coming out of HP in the future," Sood wrote.

U.S. in final phase of Iraq mission; urges new govt

BAGHDAD (Reuters) – U.S. forces are in the final phase of the Iraq war after ending combat missions, U.S. officials said Wednesday as they urged Iraqi leaders to get on with forming a government six months after an election.

Defense Secretary Robert Gates said while visiting troops in Ramadi, scene of some of the fiercest fighting of the 7-1/2 year conflict, that history would judge whether the 2003 invasion to topple dictator Saddam Hussein had been worth it.

Asked by a reporter if the United States was still at war in Iraq, Gates said: "No, I would say we're not.

"Combat operations have ceased. We're still going to work with the Iraqis on counter-terrorism. We're still doing a lot of training. And advising and assisting...So I would say that we have moved into the final phase of our engagement in Iraq."

Gates and Vice President Joe Biden were in Iraq for a ceremony at which the U.S. military's outgoing commander, General Raymond Odierno, handed over to Lieutenant General Lloyd Austin.

Tuesday marked the formal end of the combat mission launched by President Barack Obama's predecessor, George W. Bush. Obama, who had promised U.S. voters he would end the unpopular war, said in an address from the Oval Office that it was "time to turn the page" on Iraq.

Around 50,000 U.S. soldiers will stay in Iraq up to a full withdrawal by end-2011 agreed in a bilateral security pact. They are supposed to advise and assist Iraqi forces, not lead the fight against the Sunni Islamist insurgency and Shi'ite militia.

Security remains a big worry. Attacks against Iraqi security forces have been increasing, and there are concerns the end of U.S. combat operations will leave an even bigger gap for insurgents to exploit.

Tensions are also running high because of a stalemate in efforts to form a new government six months after an inconclusive election as Shi'ite-led, Sunni-backed and Kurdish factions squabble over positions and power.

"It is not our place to tell Iraqis who should lead but I strongly urge them to match the courage their citizens have shown by bringing this process to a close and forming a government," Biden said at the change of command ceremony, held in one of Saddam's former palaces near Baghdad airport.

CIVILIAN DEATHS SLIP BUT SECURITY FORCES TARGETED

The number of civilians killed by violence in August -- 295 according to the Health Ministry -- actually fell from the month before, and also compared to August last year.

But casualties were high among the Iraqi security forces as suspected Sunni Islamist insurgents targeted police and soldiers in an effort to undermine public faith in their abilities.

A total of 54 soldiers and 77 police were killed in attacks in August, the defense and interior ministries said.

Odierno, a towering hulk who is one of only a few U.S. army generals to have commanded a division, a corp and an entire theater of war in the same conflict, said he was confident the Iraqi security forces could protect the country.

"A peaceful transition of power following Iraq's credible, legitimate elections is the strongest possible response to al Qaeda and other terrorist organizations," he said, echoing Biden's call for Iraqi leaders to reach a deal.

On the visit to U.S. troops in Ramadi, in the western province of Anbar, Gates said he believed they still deserved combat pay even though their mission had changed.

Gates said judging the invasion required "a historian's perspective," but that for some Americans the war would always be clouded by the fact its original aim -- the hunt for Saddam's weapons of mass destruction -- did not turn out to be valid.

If Iraq remained a democracy and played a constructive role, it could have a significant impact on the Middle East, he said.

"How it all wehs in the balance over time I think remains to be seen," he said.

"This is going to be a work in progress for a long time. This is a new thing in the several-thousand-year history of Iraq and it's a pretty new thing in this region of the world. But I think they're off to a good start."

Gates said the United States was committed to going down to a zero presence in Iraq by the end of 2011, in accordance with the security pact, but did not rule out leaving some U.S. soldiers longer if the Iraqi government asked for them.

(Writing by Michael Christie and Serena Chaudhry; Editing by Angus MacSwan)

India Said to Seek Google, Skype Call Interception

Google, Skype and other companies providing communications services in India will have to make provisions for interception of these communications by India's security agencies, Indian home secretary, G.K. Pillai, said in Delhi on Wednesday, according to reports.

A home ministry spokesman declined to provide further information, including whether a date had been fixed for issuing notices to the companies.

The development comes two days after the Indian government announced that it was giving Research In Motion an extension of 60 days to try out the solutions RIM had proposed to give Indian law enforcement agencies access to communications on its network.

The government had last month given service providers offering the BlackBerry service until Aug. 31 to provide access to BlackBerry corporate e-mail and messaging services or face a ban on these services.

On Monday, the Ministry of Home Affairs also said in a statement thatany communication through telecommunications networks should be accessible to law enforcement agencies and all telecom service providers including third parties had to comply.

India may ask Google and Skype and some other online services to make communications on their networks accessible by the country's law enforcement agencies, Rajesh Chharia, president of the Internet Service Providers Association of India (ISPAI), told IDG News Service last month.

Chharia said that at a meeting he attended over a month ago at the country's Department of Telecommunications, there was discussion of asking other online services besides RIM to provide access to India's security agencies.

The country wants to intercept mobile and online communications as its security agencies have found that terrorists are increasingly usingemail, instant messaging, and mobile phones to plan their attacks.

Under Indian law, service providers have to give law enforcement agencies access to communications on their networks, under certain conditions, including by providing decryption keys. The Indian government seems at this point to be targeting Google's Gmail and Skype's Internet telephony service, analysts said.

A Google India spokeswoman said on Wednesday that the company had not received any notice from the government, and would review and respond only if and when it does hear from those authorities.