Finance & Business World

In a sharp challenge to the GOP, President Barack Obama proposed paying for his costly new jobs plan Monday with tax hikes that Republicans have already rejected, and he accused them of political motives if they still refuse to go along.

“The only thing that’s stopping it is politics,” Obama declared.

The president’s proposal drew criticism from House Speaker John Boehner, who’d previously responded in cautious but somewhat receptive tones to the $447 billion jobs plan made up of tax cuts and new spending that Obama first proposed in an address to Congress last Thursday.

“It would be fair to say this tax increase on job creators is the kind of proposal both parties have opposed in the past. We remain eager to work together on ways to support job growth, but this proposal doesn’t appear to have been offered in that bipartisan spirit,” Boehner spokesman Brendan Buck said.

The biggest piece of the payment plan would raise about $400 billion by eliminating certain deductions, including on charitable contributions, that can be claimed by wealthy taxpayers. Obama has proposed that in the past _ to help pay for his health care overhaul, for example _ and it’s been shot down by Republican lawmakers along with some Democrats.

Yet by daring Republicans anew to reject tax hikes on the rich Obama could gain a talking point as the 2012 presidential campaign moves forward, if not a legislative victory.

At a Rose Garden event Monday, Obama brandished his jobs bill in the air and surrounded himself with police officers, firefighters, teachers, construction workers and others he said would be helped by it. Adopting a newly combative tone that’s been welcomed by dispirited Democrats, Obama said he was sending the bill to Capitol Hill and demanded immediate action.

“This is the bill that Congress needs to pass. No games. No politics. No delays,” Obama said.

“Instead of just talking about America’s job creators, let’s actually do something for America’s job creators.”

Obama told of reading a quotation in a newspaper article from a Republican congressional aide who questioned why Republicans should work with Obama since the result might just be to help the president politically. “That was very explicit,” Obama said.

Buck, the Boehner spokesman, said the anonymous quote cited by the president didn’t reflect the view of Republican leadership.

And even as Obama was accusing Republicans of playing politics, he and his Democratic allies were marshaling an aggressive political response of their own.

Obama was traveling to Boehner’s home state of Ohio Tuesday to promote his jobs plan, and following that with a trip Wednesday to North Carolina, a traditionally Republican state he won in 2008.

He was getting back-up from the Democratic National Committee, which announced a television ad campaign starting Monday to promote Obama’s jobs plans in key swing and early-voting states and to call on voters to pressure their lawmakers for support. The ads urge viewers to “Read it. Fight for it. … Pass the President’s Jobs Plan.”

The back-and-forth was taking on elements of a political campaign, with high stakes for both sides as Obama heads into his re-election fight with the economy stalled, unemployment stuck at 9.1 percent and polls showing deep public unhappiness with his leadership on the economy.

His jobs package would combine tax cuts for workers and employers by reducing the Social Security payroll tax, with spending elements including more money to hire teachers, rebuild schools and pay unemployment benefits. There are also tax credits to encourage businesses to hire veterans and the long-term unemployed.

The payment method the White House announced Monday would consist of:

_$405 billion from limiting the itemized deductions for charitable contributions and other deductions that can be taken by individuals making over $200,000 a year and families making over $250,000;

_$41 billion from closing loopholes for oil and gas companies;

_$18 billion from requiring fund managers to pay higher taxes on certain income;

_$3 billion from changing the tax treatment of corporate jets.

White House Budget Director Jacob Lew said that Obama will also include those tax proposals in a broader debt-cutting package he plans to submit next week to a congressional “supercommittee” charged with finding $1.2 trillion in savings later this year. He said that the supercommittee would have the option of accepting the payment mechanisms for the jobs bill proposed by Obama, or proposing new ones.

Republicans have indicated they’re receptive to supporting Obama’s proposed payroll tax cut and finding a way to extend unemployment benefits, though many have rejected Obama’s planned new spending. Obama’s new proposal Monday to pay for it all by raising taxes without any proposals to cut spending is unlikely to win him any new GOP support for any element of his plan.

“I sure hope that the president is not suggesting that we pay for his proposals with a massive tax increase at the end of 2012 on job creators that we’re actually counting on to reduce unemployment,” said House Majority Leader Eric Cantor, R-Va.

The new DNC ads are airing in: Denver; Tampa and Orlando, Fla.; Des Moines, Iowa; Las Vegas; Manchester, N.H.; Raleigh and Charlotte, N.C.; Columbus and Cleveland, Ohio and Norfolk, Richmond and Roanoke, Va.; as well as Washington, D.C.

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Associated Press writers Julie Pace and Darlene Superville contributed to this report.

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Employers added no jobs in August _ an alarming setback for the economy that renewed fears of another recession and raised pressure on Washington to end the hiring standstill.

Worries flared Friday after release of the worst jobs report since September 2010. Total payrolls were unchanged, the first time since 1945 that the government reported a net job change of zero. The unemployment rate stayed at 9.1 percent.

The stock market plunged in response. The Dow Jones industrial average fell 253 points, or more than 2 percent.

Analysts say the economy cannot continue to expand unless hiring picks up. In the first six months of 2011, growth was measured at an annual rate of 0.7 percent.

Companies are mostly keeping their payrolls intact. They’re not laying off many workers, but they’re not hiring, either. Without more jobs to fuel consumer spending, economists say another recession would be inevitable. Consumer spending accounts for about 70 percent of economic growth.

Like a wobbling bicycle, “you either reaccelerate or you fall over, said James O’Sullivan, chief economist at MF Global. “Something has to give.”

Consumer and business confidence was shaken this summer by the political standoff over the federal debt limit, a downgrade of long-term U.S. debt and the financial crisis in Europe. Tumbling stock prices escalated the worries.

Even before it stalled last month, job growth had been sputtering. The economy added 166,000 jobs a month in the January-March quarter, 97,000 a month in the April-June quarter and just 43,000 a month so far in the July-September period.

“Underlying job growth needs to improve immediately in order to avoid a recession,” said HSBC economist Ryan Wang.

The dispiriting job numbers for August will heighten the pressure on the Federal Reserve, President Barack Obama and Congress to find ways to stimulate the economy.

So far, the Fed has been reluctant to launch another round of Treasury bond purchases. Its previous bond-buying programs were intended to force down long-term interest rates, encourage borrowing and boost stock prices.

On Thursday, Obama will give a televised speech to a joint session of Congress to introduce a plan for creating jobs and spurring economic growth.

Even for people who do have jobs, income growth is stalled. That will hold back their ability to spend. The only sure way to reduce the risk of recession is with more hiring, economists say.

“The importance of job growth cannot be overstated,” said Joshua Shapiro, chief U.S. economist at MFR Inc.

The economy needs to add roughly 250,000 jobs a month to rapidly bring down the unemployment rate. The rate has been above 9 percent in all but two months since May 2009. Roughly 14 million Americans are unemployed.

The weakness was underscored by revisions to the jobs data for June and July. Collectively, those figures were lowered to show 58,000 fewer jobs added than previously thought. The downward revisions were all in government jobs.

The average workweek and hourly earnings also declined in August. Cutbacks by federal, state and local governments have erased 290,000 government jobs this year, including 17,000 in August.

“There is no silver lining in this one,” said Steve Blitz, senior economist at ITG Investment Research. “It is difficult to walk away from these numbers without the conclusion that the economy is simply grinding to a halt.”

The unemployment rate for black men jumped a full percentage point in August to 18 percent. That’s the highest level for that group since March 2010. And unemployment for black people as a whole surged from 15.9 percent to 16.7 percent even as unemployment for white Americans ticked down to 8 percent from 8.1 percent.

Obama has faced doubts within his own party, including black lawmakers who say he hasn’t done enough to help chronic unemployment in black communities.

Yet Obama is unlikely to win support for any new stimulus spending from congressional Republicans, who oppose further spending and argue that the president’s economic policies have failed. They favor deeper spending cuts and less government regulation.

On Friday, Obama took a step toward winning their support. He directed the Environmental Protection Agency to abandon rules that would have tightened health-based standards for smog. Republicans and some business leaders have said the proposed rules would have cost jobs.

Kurt Karl, chief economist for the Americas at Swiss Re, said the August jobs report “implies a rising probability of recession.”

Still, he noted, employment fell for six quarters after the 2001 recession _ and the economy kept chugging along at an annual rate of 2.1 percent over that time.

The economy’s 0.7 percent growth rate in the first half of 2011 was the slowest six months of growth since the recession officially ended in June 2009.

Most economists expect growth to improve to about a 2 percent annual rate in the July-September quarter. Lower gasoline prices have provided some relief to consumers. And factories are revving up again after being interrupted by Japan’s earthquake and nuclear crisis.

Before Friday’s jobs report, the economy had been showing signs of better health. Consumer spending was strong in August. Auto sales were brisk. Manufacturing expanded. And fewer people applied for unemployment benefits.

Yet even 2 percent growth isn’t fast enough to generate many jobs. And the economy remains vulnerable to outside shocks _ a worsening European debt crisis or more political brinkmanship in Washington.

“The economy’s perforated at this point,” said Sean Snaith, director of the University of Central Florida’s Institute for Economic Competitiveness. “Any additional strain on it will tear it apart.”

The Obama administration has estimated that unemployment will average about 9 percent next year, when Obama will seek re-election. The rate was 7.8 percent when he took office.

The White House Office of Management and Budget projects overall growth of just 1.7 percent this year.

“The economy continues to stagger,” said Sung Won Sohn, economist at California State University Channel Islands. “It wouldn’t take much (of a) shock to tip it onto a recession.”

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The Justice Department is seeking to block AT&T Inc.’s $39 billion plan to buy T-Mobile USA Inc., claiming that combining the two wireless giants could stymie competition and innovation.

The agency filed a civil antitrust lawsuit Wednesday morning in federal court in Washington that would prevent AT&T, which has the second-largest subscriber base in the country, from acquiring fourth-largest T-Mobile.

The deal, according to the Justice Department, would displace Verizon Wireless as the largest wireless carrier in the U.S., leading to higher prices, lower-quality services, a smaller pool of choices and fewer pioneering technologies for millions of Americans.

Consumers in rural areas or with lower incomes would be especially hard-hit, Deputy Attorney General James M. Cole said.

AT&T said it was ’surprised and disappointed” by the Justice Department’s move, saying that it had met often with the agency to work over the potential pitfalls of the deal.

The proposed purchase had sparked heavy protests from consumer groups and rival telecom companies. With more than 300 million phones, tablets and other mobile wireless devices in service across the country, AT&T, T-Mobile, Sprint and Verizon dominate more than 90 percent of the market, the government said easy pay day loans.

Taking T-Mobile out of play would eliminate AT&T’s need to compete on operational efficiency and aggressive pricing, the Justice Department said.

After asking AT&T and T-Mobile for more information about the competitive concerns, the Federal Communications Commission last week continued its review. Though the process is still incomplete, Chairman Julius Genachowski said Wednesday that what his agency has seen so far “also raises serious concerns.”

“Vibrant competition in wireless services is vital to innovation, investment, economic growth and job creation, and to drive our global leadership in mobile,” he said in a statement.

Earlier in the day, AT&T announced it would repatriate 5,000 call center jobs to the U.S. that had been outsourced overseas if the takeover of T-Mobile goes through.

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QUOTE OF THE WEEK

“I wish we had treated jobs the way we treated this debt ceiling, which was a bit of a manufactured crisis, which jobs isn’t. So what if we got everyone together and said let’s set a deadline to figure out how you actually create jobs in this country. Can you imagine if the passion and energy that went into this ridiculous debt ceiling had gone into how do we actually get jobs created?”

U.S. stocks fluctuated Wednesday after companies reported strong earnings but gave mixed forecasts for the future.

Target Corp., Staples Inc. and Dell Inc. all reported earnings for last quarter that were above analysts’ forecasts. Companies in the Standard & Poor’s 500 are on track to report higher profits for a ninth straight quarter. But economic growth is weak around the world, and some economists worry that a second recession may be coming. That could pull down future results.

Target and Staples both gave profit forecasts that were above Wall Street’s expectations, but Dell cut its prediction for revenue growth this year.

The Dow Jones industrial average fell 49 points, or 0.4 percent, to 11,357 at 1:30 p.m. in New York. It had been up as many as 120 around 10:30 a.m. The S&P 500 fell 4, or 0.4 percent, to 1,188. The Nasdaq composite fell 26, or 1.1 percent, to 2,497.

Six of the 10 sectors that make up the S&P 500 rose. Four fell, led by a 1.4 percent drop for technology stocks after Dell’s forecast cut.

“There are a whole bunch of contradictory signals in the system now, and it’s hard to tell which way to go,” said Charlie Smith, chief investment officer of Fort Pitt Capital Group, which has just over $1 billion in assets under management.

The increased role of automated trading by computers has increased volatility, making investing more difficult. “When you get a piece of news, it’s almost like the machines are trying to out-quick each other,” and they are sending stocks in straight lines up or down, Smith said. “That’s what really scares retail investors. We try to sit and wait in the weeds for good businesses at good prices.”

He has focused on telecom stocks and cable companies. Their relatively big dividend yields look more attractive given low yields on bonds. The yield on the 10-year Treasury note is at 2.17 percent, down from 3.34 percent at the start of the year.

Telecom stocks in the S&P 500 rose 1.1 percent Wednesday, the most among the 10 sectors that make up the index. Utility stocks also tend to pay dividends, and they rose 0.8 percent.

Energy stocks rose 0.4 percent after crude oil gained 95 cents per barrel to $87.60.

Dell said late Tuesday its profit rose 63 percent last quarter on strong demand from businesses and government agencies. But it also cited “a more uncertain demand environment” when it cut its forecast for annual revenue growth to a range of 1 percent to 5 percent paperless payday loans. That’s down from an earlier growth forecast for 5 percent to 9 percent. Dell stock fell 10.5 percent Wednesday.

Other companies are more optimistic. Retailer Target said it expects to earn between $4.15 per share and $4.30 per share this year. Analysts had expected $4.14 per share. Target also said its earnings last quarter rose 3.7 percent on sales of grocery, beauty products and other items. Target shares rose 1.5 percent.

Office products retailer Staples raised its profit forecast for the year after saying strong international sales pushed earnings up 36 percent last quarter.

Deere also raised its forecast for full-year earnings. It now expects to earn $2.7 billion this fiscal year, up from a May forecast of $2.65 billion. The maker of tractors and other heavy equipment said its profit rose 15 percent last quarter on strong demand for farm equipment.

Companies are making more money, but many have done so by raising prices to offset higher costs. Higher food prices helped push inflation at the wholesale level to 0.2 percent in July, according to a government report Wednesday. But that is still well below inflation levels earlier this year when oil prices were spiking because of violence in the Middle East. In February, wholesale inflation was 1.5 percent.

Stocks have been particularly volatile in August. Worries rose as the U.S. government said it may default on its debt unless it was allowed to borrow more. The government just beat the deadline to avoid a default, but the partisanship in the debate came at a cost _ Standard & Poor’s downgraded the U.S. credit rating on Aug. 5 by one notch to AA+ from the top AAA rating. That triggered one of Wall Street’s wildest weeks: The Dow rose or fell by at least 400 points in each of the first four days of last week, the first time that has happened.

Markets appear to have calmed somewhat since then. Tuesday marked the first time since the Aug. 5 downgrade that the Dow rose or fell by less than 100 points. It fell 76 points on worries about Europe’s ability to contain its debt problems. Some European countries have borrowed so much that investors fear they won’t be able to repay their debts. The Dow had been down as many as 190 points earlier Tuesday.

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Britain’s prime minister hammered out a tough line against rioters Wednesday, determined to restore order and confidence on Britain’s streets as extra police officers flooded the capital for a second day.

Even as Prime Minister David Cameron promised not to let a “culture of fear” take hold, tensions flared in Birmingham, where a murder probe was opened after three men were killed in a hit-and-run reportedly as they took to the streets to deter potential rioters.

“We needed a fightback and a fightback is under way,” Cameron said in a somber televised statement outside his Downing Street office after a meeting of the nation’s crisis committee. As if to underline his resolve, he underlined “nothing is off the table” _ including water cannon, commonly used in Northern Ireland but never deployed in mainland Britain.

The number of arrests in London alone climbed to 805, with courts staffing around the clock to process alleged looters, vandals and thieves _ including one as young as 11. Cameron has recalled Parliament from its summer recess for an emergency debate on the riots Thursday.

Outside the capital, in England’s second largest city of Birmingham, police launched a murder investigation into the deaths of three men hit by a car. Residents said the dead men, aged 20 to 31, were members of Birmingham’s South Asian communities who had been patrolling their neighborhood to keep it safe from looters.

“They lost their lives for other people, doing the job of the police,” said witness Mohammed Shakiel, 34. “They weren’t standing outside a mosque, a temple, a synagogue or a church _ they were standing outside shops where everybody goes. They were protecting the community.”

Tariq Jahan, whose 21-year-old son Haroon was killed, stood in a Birmingham street and pleaded with the South Asian community not to seek revenge against the car’s occupants, reported to be black.

“Today we stand here to plead with all the youth to remain calm, for our community to stand united,” he said.

“This is not a race issue. The family has received messages of sympathy and support from all parts of the community _ all races, all faiths and backgrounds.”

He remonstrated with angry young men, urging them to “grow up” and go home.

Chris Sims, chief constable of West Midlands Police, said a man had been arrested on suspicion of murder.

“The information we have at the moment would support the idea that the car was deliberately driven,” he said, appealing for calm. “My concern would be that that single incident doesn’t lead to a much wider level of distress and even violence between different communities.”

The violence has revived debate about the Conservative-led government’s austerity measures, which will slash 80 billion pounds ($130 billion) from public spending by 2015 to reduce the country’s swollen budget deficit.

Cameron’s government has slashed police budgets as part of the cuts. A report last month said the cuts will mean 16,000 fewer police officers by 2015.

London mayor Boris Johnson _ like Cameron, a Conservative _ broke with the government to say such cuts are wrong.

“That case was always pretty frail and it has been substantially weakened,” he told BBC radio. “This is not a time to think about making substantial cuts in police numbers.”

But in London, an eerie calm prevailed. Scenes of ransacked stores, torched cars and blackened buildings have frightened and outraged Britons just a year before their country is to host next summer’s Olympic Games, bringing demands for a tougher response from law enforcement. Police across the country have made almost 1,200 arrests _ including 800 in London _ since the violence broke out in the capital on Saturday.

Armored vehicles and convoys of police vans backed up some 16,000 officers on duty _ almost triple the number who were out Monday night. The show of force seems to have worked _ there were no reports of major trouble in London on Tuesday night, although there were scores of arrests.

“What happened in London last night was, when community leaders and the police came together, there were significant arrests,” said police deputy assistant chief constable Stephen Kavanagh. “Some looters were taken away before they got into doing anything, but it was that joint action that made the difference.”

Britain’s soccer authorities were talking with police to see whether this weekend’s season-opening matches of the Premier League could still go ahead in London. A Wednesday match between England and the Netherlands at London’s Wembley stadium was canceled.

Britain’s riots began Saturday when an initially peaceful protest over a police shooting in London’s Tottenham neighborhood turned violent. That clash has morphed into a general lawlessness in London and several other cities that police have struggled to halt.

While the rioters have run off with goods every teen wants _ new sneakers, bikes, electronics and leather goods _ they also have torched stores apparently just to see something burn. They were left virtually unchallenged in several neighborhoods, and when police did arrive they often were able to flee quickly and regroup.

Some residents stood guard to protect their neighborhoods _ Sikhs protected their temple in Southall, west London, and some 1,000 far-right members reportedly took to the streets to deter rioters.

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Europe’s top central banker says the bank’s “unconventional” moves to buy eurozone government bonds are aimed at restoring confidence to a financial system shaken by the worst crisis since World War II.

European Central Bank Chairman Jean-Claude Trichet says the bank “is in the secondary market” for eurozone bonds, but he said details on which bonds and how much of them the bank bought will only be disclosed on Monday.

Trichet spoke in an interview on French radio station Europe 1 Tuesday. Trichet declined to say how long the bank would continue buying bonds in the secondary market, insisting that it was up to governments to take over the job “as rapidly as possible.”

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Mitsubishi Motors sprang back into the black for the fiscal first quarter as growth in emerging markets offset damage from the quake in northeastern Japan.

Mitsubishi Motors Corp. said Monday it posted a 4.3 billion yen ($55 million) profit for the April-June period, a reversal from 11.8 billion yen in red ink a year earlier.

Quarterly sales rose nearly 7 percent to 431.9 billion ($5.5 billion) from the previous year.

The Tokyo-based manufacturer of the i-MiEV electric car raised its first half forecast because of the better-than-expected quarterly numbers. But it left its annual forecast unchanged at a 20 billion yen ($256 million) profit, pointing to uncertainties in the global economy.

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An intensifying voicemail hacking and police bribery scandal cut closer than ever to Rupert Murdoch and Scotland Yard on Sunday with the arrest of the media magnate’s former British newspaper chief and the resignation of London’s police commissioner.

Though the former executive, Rebekah Brooks, and the police chief, Paul Stephenson, have denied wrongdoing, both developments are ominous not only for Murdoch’s News Corp., but for a British power structure that nurtured a cozy relationship with his papers for years.

Brooks, the ultimate social and political insider, dined at Christmas with Prime Minister David Cameron. His Conservative-led government is now facing increasing questions about its relationship with Murdoch’s media empire.

The arrest of the 43-year-old Brooks, often described as a surrogate daughter to the 80-year-old Murdoch, brought the British police investigations into the media baron’s inner circle for the first time. It raises the possibility that Murdoch’s old friend Les Hinton, who resigned Friday as publisher of The Wall Street Journal, or his 38-year-old son and heir apparent, James, could be next.

Until her resignation Friday, Brooks was the defiant chief executive of News International, Murdoch’s British newspaper arm, whose News of the World tabloid stands accused of hacking into the phones of celebrities, politicians, other journalists and even murder victims. In the tumultuous last two weeks, she had kept her job even as Murdoch shut down the 168-year-old News of the World and tossed 200 other journalists out of work.

On Sunday she showed up for a prearranged meeting with London police investigating the hacking and was arrested. She was being questioned on suspicion of conspiring to intercept communications _ phone hacking _ and on suspicion of corruption, which relates to bribing police for information.

Brooks’ spokesman, David Wilson, said police contacted her Friday to arrange a meeting and she voluntarily went “to assist with their ongoing investigation.” He claimed that Brooks did not know she was going to be arrested.

Hours after Brooks’ arrest, Stephenson said he was resigning as commissioner of London’s force because of “speculation and accusations” about his links to Neil Wallis, a former News of the World executive editor who was arrested last week in the scandal. Wallis worked for the London police as a part-time PR consultant for a year until September 2010.

Stephenson said he did not make the decision to hire Wallis and had no knowledge of allegations that he was linked to phone hacking, but he wanted his police force to focus on preparing for the 2012 London Olympics instead of wondering about a possible leadership change.

“I had no knowledge of the extent of this disgraceful practice and the repugnant nature of the selection of victims that is now emerging,” Stephenson said. “I will not lose any sleep over my personal integrity.”

Brooks’ arrest was the latest blow for Murdoch, the once all-powerful figure courted by British politicians of all stripes. Now Murdoch is struggling to tame a scandal that has already destroyed News of the World, cost the jobs of Brooks and Hinton and sunk the media baron’s dream of taking full control of a lucrative satellite broadcaster, British Sky Broadcasting.

Deputy Prime Minister Nick Clegg said Murdoch “needs to come absolutely clean about what he knew, about what his senior executives knew, and why this culture of industrial-scale corruption _ so it is alleged _ appeared to have grown up without anyone higher up in the food chain taking any real responsibility for it.”

Rupert and James Murdoch are to be grilled by U.K. lawmakers Tuesday over the scandal. Brooks also had agreed to be questioned before a parliamentary committee, but her arrest throws that appearance into doubt.

“Obviously this complicates matter greatly,” said Wilson, her spokesman. “Her legal team will have to have discussions with the committee to see whether it would still be appropriate for her to attend.”

Lawmaker Adrian Sanders said if Brooks did not appear, “that is not going to go down very well with my fellow committee members.”

When Brooks stepped down Friday, she said she was going to “concentrate on correcting the distortions and rebutting the allegations about my record.”

She was editor of News of the World between 2000 and 2003, when some of the phone hacking took place, but has always said she did not know it was going on, a claim greeted with skepticism by many who worked there.

At an appearance before U.K. lawmakers in 2003, Brooks admitted that News International had paid police for information. That admission of possible illegal activity went largely unchallenged at the time and lawmakers are keen to ask her about it again.

Police previously arrested nine other people, including several former News of the World reporters and editors, over allegations of hacking and bribery. Those include Andy Coulson, a former News of the World editor who became Cameron’s communications chief before resigning in January. No one has yet been charged.

Even more senior figures could face arrest, including James Murdoch, chairman of BSkyB and chief executive of his father’s European and Asian operations. James Murdoch did not directly oversee the News of the World, but he approved payments to some of the paper’s most prominent hacking victims, including 700,000 pounds ($1.1 million) to Professional Footballers’ Association chief Gordon Taylor.

James Murdoch said last week that he “did not have a complete picture” when he approved the payouts.

Hinton, too, could face questioning over wrongdoing at the News of the World during his 12 years as executive chairman of News International. But Hinton is an American citizen living in the U.S., so British authorities would have to seek his extradition if he refused to come willingly.

Chandrashekhar Krishnan, executive director of Transparency International UK, said British prosecutors seeking to prove that bribes that were approved at a high level would have to uncover strong evidence such as memos or minutes of a meeting.

“That usually proves to be very, very difficult,” he said.

Rupert Murdoch is eager to stop the crisis from spreading to the United States, home of many of his most lucrative assets _ including the Fox TV network, 20th Century Fox film studio, The Wall Street Journal and the New York Post. The FBI has already opened an inquiry into whether 9/11 victims or their families were also hacking targets of News Corp. journalists.

On Sunday, Murdoch took out full-page ads in British newspapers promising that News Corp. would make amends for the phone hacking scandal, with the title “Putting right what’s gone wrong.” News Corp. vowed there would “be no place to hide” for wrongdoers.

That followed a full-page Murdoch ad Saturday declaring, “We are sorry.”

Murdoch’s critics say that is not enough. Labour Party leader Ed Miliband said Sunday that Murdoch has “too much power” in Britain and his share of media ownership should be reduced.

Murdoch still owns three national British newspapers _ The Sun, The Times and The Sunday Times _ and a 39-percent share of BSkyB.

At Tuesday’s committee hearing, which will be televised, politicians will seek answers about the scale of criminality at the News of the World. The Murdochs will try to avoid incriminating themselves or doing more harm to their business without misleading Parliament, which is a crime.

Police, meanwhile, are under pressure to explain why their original hacking investigation several years ago failed to find enough evidence to prosecute anyone other than News of the World royal reporter Clive Goodman and private investigator Glenn Mulcaire. Detectives reopened the investigation earlier this year and now say they have the names of 3,700 potential victims.

Records show that senior officers had numerous meals and meetings with News International executives in the past few years.

Stephenson, who became police chief in 2009, said he had “no knowledge of, or involvement in, the original investigation into phone hacking in 2006.” He said he was “unaware that there were any other documents in our possession of the nature that have now emerged.”

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