History lesson: Why did Congress create a national debt limit?

(Jay Mallin/Bloomberg)

Now that the Treasury Department has nixed the odd idea of issuing a platinum coin to get around the federal debt limit, Congress once again will be forced to decide whether to raise the debt limit.

When this issue last loomed in 2011, we looked deeply at the question of whether the United States had ever defaulted before. (Answer: It is not entirely unprecedented. There are three instances when the United States could be seen to have defaulted on its obligations — in 1790, in 1933 and in 1971.)

The debt limit covers both publicly-held debt and debts the United States owes to itself (bonds to Social Security and Medicare for future obligations) so no matter what happens, the debt limit will have to be raised, one way or the other.

But for readers who have been wondering, here’s a history lesson why the United States has a debt limit in the first place. Essentially, Congress was trying to make life easier for itself.

It started with a war.

In the early decades of the Republic, Congress preferred to issue debt for specific purposes, such as issuing bonds to build the Panama Canal. During the Spanish-American War of 1898, Congress authorized the Treasury Secretary to issue short-term debt and some longer-term debt with specific limits on maturities.

But World War I was a conflict with unknowable costs, making targeted legislation difficult. At first Congress established a $5 billion limit on new issues of bonds, along with the immediate issuance of $2 billion in one-year certificates of indebtedness, in the First Liberty Loan Act of 1917.

But very quickly another law was needed-- the Second Liberty Bond Act of 1917—in which Congress set a general limit on borrowing--$9.5 billion in Treasury bonds and $4 billion in one-year certificates. This freed the Treasury Secretary to begin to figure out the best mix of securities to issue, without nearly as much congressional oversight as before.

By the end of World War I, the limit on Treasury obligations had been raised to $43 billion, which was considerably more than the $25 billion in outstanding public debt in 1919. For decades, future increases in the national debt were simply amendments to the Second Liberty Bond Act. But it was not in 1939—on the eve of the World War II—that Congress eliminated all of the different limits on types of bonds, thus creating an overall aggregate limit on the national debt.

We learned much of this from an interesting 1954 history of the debt limit, published in the Journal of Finance, by H.J. Cooke and M. Katzen, which was posted on the Monkey Cage blog. The article notes that the debt limit generally was raised without controversy until a White House request to raise the limit in 1953 was sidetracked in the Senate, “where the ceiling was viewed as an instrument for forcing economy on the executive branch of the government.”

Hmm, that sounds familiar.

But in that case, it was a Republican president, Dwight D. Eisenhower, who faced a roadblock from a Democratic senator, Harry F. Byrd of Virginia, who then chaired the Senate Finance Committee.

Eisenhower wanted to build the national highway system, which he considered an important investment in the future, but Byrd was concerned that national debt built up during World War II and the Great Depression was becoming a permanent feature of the U.S. government. Eisenhower asserted that he had “moved promptly and vigorously” to cut spending but still needed the debt limit raised in order to pay outstanding bills.

But Byrd was not satisfied and he so demanded more cuts in exchange for a debt limit increase. For a while, Byrd held the upper hand, forcing Treasury to take emergency measures to avoid default, but eventually Eisenhower got the debt ceiling raised in 1954, though not as much as he had hoped.

“An essential part of this preparedness [for national security] is a debt limit high enough to permit the Treasury, if necessary, to borrow the funds required to carry out the Government’s obligations under the Constitution and under the laws of the Congress,” Eisenhower said when he signed the bill establishing the new debt limit.

In other words, there are no original ideas in politics. The debt limit was originally conceived as a way to make things easier for Congress, because lawmakers were tired of having to issue bonds for specific purposes. (Congress, after all, had already decided to spend the money.) But then Congress often finds a way to make the easy stuff harder.

Indeed, when he was a senator, President Obama also refused to approve a debt limit increase in 2006 without a plan to reduce the deficit. The president now acknowledges that was a “political vote, as opposed to doing what was important for the country—which he regrets.

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Asian stocks up, Shanghai jumps on regulator comments

HONG KONG: Asian shares were mostly higher on Monday, led by a surge on the Shanghai index after the securities regulator raised hopes for increased foreign investment in China's stock market.

The euro made further gains after upbeat comments last week by the European Central Bank chief, and the yen slid again after reports that the Bank of Japan and government were poised to set a two-per cent inflation target.

Shanghai surged 3.06 per cent, or 68.74 points, to 2,311.74 after the head of China's securities regulator, Guo Shuqing, said the investment quota for foreigners in the domestic equity market could be increased 10-fold.

Hong Kong rose 0.64 per cent, or 149.19 points, to 23,413.26, Seoul added 0.52 per cent, or 10.37 points, to 2,007.04 and Sydney closed up 0.22 per cent, or 10.2 points, at 4,719.7.

But Singapore slipped 0.31 per cent, or 9.91 points, to 3,206.59, pulled down by property stocks after the government introduced new measures at the weekend to cool the local market.

Tokyo was closed for a public holiday.

At a Hong Kong conference on Monday, Guo said at present investment by foreign institutions -- individuals are barred -- accounts for "just 1.5 or 1.6 per cent" of China's A-share market, stock denominated in the domestic yuan currency.

He said the quota could be increased 10-fold in an effort to boost the stock market, without elaborating.

There was no clear lead from Wall Street, where stocks closed in mixed territory on Friday.

The Dow Jones Industrial Average was up 0.13 per cent, the broad-based S&P 500 was flat, while the tech-heavy Nasdaq Composite rose 0.12 per cent.

Investors were looking ahead to a speech by US Federal Reserve chief Ben Bernanke later on Monday.

Minutes from the December meeting of Fed policymakers showed they were divided over how long the central bank should continue asset purchases.

But dealers thought Bernanke was likely to put an end to speculation that US policymakers may end the quantitative-easing programme, with expectations about his comments pushing down the dollar.

"I'd be shocked if he said anything other than they're buying bonds for the long haul," said Davis Scutt, a currency trader at Arab Bank in Sydney.

After tumbling on Friday when the Japanese government unveiled a stimulus package, the yen slid further as reports said the Bank of Japan and the government would jointly set a two-per cent inflation target following pressure from new Prime Minister Shinzo Abe.

The two sides are to finalise a joint statement on monetary measures in time for the central bank's policy meeting on January 21-22, the Asahi Shimbun reported.

A weaker yen helps the country's many exporters, as it makes their products cheaper abroad.

The euro has been surging since Thursday when ECB chief Mario Draghi said there was "a significant improvement in financial market conditions" in the single currency bloc.

On foreign exchange markets in Asian afternoon trade, the euro was at $1.3387, compared to $1.3341 in the US late Friday. The dollar was at 89.61 yen from 89.18 yen, and the euro traded at 119.96 yen from 119.00 yen.

Oil was up. New York's main contract, light sweet crude for delivery in February, rose 69 cents to $94.25 a barrel in the afternoon, and Brent North Sea crude for February delivery gained 43 cents to $111.07.

Gold was at 1,669.90 at 0935 GMT compared with $1,669.80 late Friday.

In other markets:

-- Wellington rose 0.54 per cent, or 22.16 points to 4,153.92.

Fletcher Building added 1.61 per cent to NZ$8.86, Telecom Corp rose 1.08 per cent to NZ$2.335 and The Warehouse gained 0.66 per cent to NZ$3.07.

-- Taipei was flat, edging up 4.82 points to 7,823.97.

Taiwan Semiconductor Manufacturing Co gained 1.0 per cent at NT$102.0 while leading smartphone maker HTC climbed 5.1 per cent to NT$291.0.

-- Manila advanced 0.70 per cent, or 42.15 points, to 6,093.90.

Top-traded Bloomberry Resorts Corp. gained 1.54 per cent to 13.16 pesos while BDO Unibank rose 2.46 per cent to 77 pesos.

- AFP/xq

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Killing of jawans: India lodges protest with Pak at flag meet

JAMMU: Indian Army on Monday lodged a strong protest with Pakistan army over the killing of two of its jawans, one of whom was beheaded, and continued ceasefire violations along the LoC in Poonch sector of Jammu and Kashmir.

"The flag meeting between brigade commanders of India and Pakistan started around 1300 hours and ended at 1332 hours at Chakan-Da-Bagh Crossing-Point in Poonch sector", a senior Army officer said.

The Indian team was led by 10th Bridage (Krishnaghati Brigade) commander Brig T S Sandhu in the meeting with the Pakistan brigade commander at Chakan-da-Bagh crossing point along the Line of Control (LoC) in Poonch district.

The officer said further details were awaited as the team was returning from the forward area.

Army had lodged a strong protest with Pakistan army over the brutal, barbaric and inhuman killing of two Army jawans after intrusion in Poonch sector on January 8 and also continued ceasefire violations by Pakistani troops.

The Indian Army had sent a hotline message to Pakistan army on January 11 and called for a brigade commander-level flag meeting to discuss the issues of brutal killing of two jawans after major intrusion by Pakistani troops of 29 Baloch Regiment and increasing incidents of firing and ceasefire violations in Poonch sector.

Pakistan had on Sunday responded to the request for flag meeting through hot-line, he said, adding that "we had sought flag meeting of the two brigade commanders".

Pakistan's high commissioner Salman Bashir was earlier summoned in Delhi by foreign secretary Ranjan Mathai, who had lodged a strong protest over Pakistani army action in which the two soldiers were killed and their bodies were subjected to "barbaric and inhuman mutilation".

Pakistan has suspended cross-LoC trade and travel at Chakan-Da-Bagh crossing point in Poonch sector since Thursday and Friday respectively.

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How NRA’s true believers converted a marksmanship group into a mighty gun lobby

In gun lore it’s known as the Revolt at Cincinnati. On May 21, 1977, and into the morning of May 22, a rump caucus of gun rights radicals took over the annual meeting of the National Rifle Association.

The rebels wore orange-blaze hunting caps. They spoke on walkie-talkies as they worked the floor of the sweltering convention hall. They suspected that the NRA leaders had turned off the air-conditioning in hopes that the rabble-rousers would lose enthusiasm.

The Old Guard was caught by surprise. The NRA officers sat up front, on a dais, observing their demise. The organization, about a century old already, was thoroughly mainstream and bipartisan, focusing on hunting, conservation and marksmanship. It taught Boy Scouts how to shoot safely. But the world had changed, and everything was more political now. The rebels saw the NRA leaders as elites who lacked the heart and conviction to fight against gun-control legislation.

And these leaders were about to cut and run: They had plans to relocate the headquarters from Washington to Colorado.

“Before Cincinnati, you had a bunch of people who wanted to turn the NRA into a sports publishing organization and get rid of guns,” recalls one of the rebels, John D. Aquilino, speaking by phone from the border city of Brownsville, Tex.

What unfolded that hot night in Cincinnati forever reoriented the NRA. And this was an event with broader national reverberations. The NRA didn’t get swept up in the culture wars of the past century so much as it helped invent them — and kept inflaming them. In the process, the NRA overcame tremendous internal tumult and existential crises, developed an astonishing grass-roots operation and became closely aligned with the Republican Party.

Today it is arguably the most powerful lobbying organization in the nation’s capital and certainly one of the most feared. There is no single secret to its success, but what liberals loathe about the NRA is a key part of its power. These are the people who say no.

They are absolutist in their interpretation of the Second Amendment. The NRA learned that controversy isn’t a problem but rather, in many cases, a solution, a motivator, a recruitment tool, an inspiration.

Gun-control legislation is the NRA’s best friend: The organization claims an influx of 100,000 new members in recent weeks in the wake of the elementary school massacre in Newtown, Conn. The NRA, already with about 4 million members, hopes that the new push by Democrats in the White House and Congress to curb gun violence will bring the membership to 5 million.

The group has learned the virtues of being a single-issue organization with a very simple take on that issue. The NRA keeps close track of friends and enemies, takes names and makes lists. In the halls of power, it works quietly behind the scenes. It uses fear when necessary to motivate supporters. The ultimate goal of gun-control advocates, the NRA claims, is confiscation and then total disarmament, leading to government tyranny.

“We must declare that there are no shades of gray in American freedom. It’s black and white, all or nothing,” Executive Vice President Wayne LaPierre said at an NRA annual meeting in 2002, a message that the organization has reiterated at almost every opportunity since.

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MSF to focus on better organising its delivery of social services

SINGAPORE: Acting Minister for Social and Family Development Chan Chun Sing said his ministry will focus on how to better deliver social services to the people.

This comes after Finance Minister Tharman Shanmugaratnam announced that Budget Day this year will be on February 25.

Mr Chan spoke to reporters on the sidelines of a community event on Sunday morning.

He noted that beyond adjusting and tweaking some of the policies, it is important to assess how these policies can be systematically implemented across the ministry's entire span of social services.

He added that announcements will be made by his ministry in the lead-up to Budget Day.

Mr Chan said: "The focus is not just on the policies alone, of course that we will do, but the focus is also to make sure that we organise ourselves better so that we prepare the ground and set up the social service infrastructure for the many years to come so that in time to come when our social needs increase, when we have more social challenges, we have what we call the social service infrastructure in place to deliver the help to the people in need."

- CNA/fa

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People living near LoC demand grant for constructing bunkers

SRINAGAR: People living in areas close to Line of Control (LoC) in Kashmir are demanding special grant for construction of bunkers to escape shelling as India and Pakistan have resumed hostilities by heavy firing at each others' position.

Residents of villages close to the LoC in Uri sector of north Kashmir Baramulla district claim that the earthquake of 2005, which had flattened wide parts of Kashmir on either side of the ceasefire line, had destroyed their bunkers.

"We did not reconstruct those bunkers as we did not feel the need. The ceasefire between India and Pakistan along the LoC had held good for two years," Mohammad Aslam, a resident of Churunda village in Uri, said.

Churunda has been the worst affected areas in recent time as three civilians were killed in Pakistani shelling in October last year.

The village was again the target on January 6 but the cross LoC shelling resulted in damage to a residential house.

India and Pakistan agreed to a ceasefire along the Line of Control in Jammu and Kashmir in November 2003. Barring minor aberrations, the ceasefire had been successful, providing major relief to the residents of borders areas in the state who were living in constant fear.

However, the recent incidents of shelling along the LoC and transgression of the ceasefire line by Pakistani troops in Mendhar area of Poonch district is threatening the truce pact. Two Indian soldiers were killed in Mendhar incident while Pakistan has claimed that two of its soldiers died in shelling by Indian army since January 6.

A delegation of villagers living close to LoC told PTI that government should provide them special grant for reconstructing the bunkers in case the hostilities continue.

"The government should either construct or provide us money to construct these bunkers. If they fail to do so, we might have to migrate from the area," Bashir Ahmad, who was heading the delegation, said.

He said the areas of Uri likely to be affected by cross-LoC shelling include Hathlanga, Churunda, Tilwari, Silikote and Sura, where over 1,000 families reside.

District development commissioner Baramulla Khwaja Ghulam Ahmad said the authorities have not received any representation for construction of bunkers so far.

"However, we will forward a proposal to Government if any such application is received," Ahmad said.

He said all the families living along the LoC in Uri were given Rs 15,000 in mid-1990s for construction of the underground bunkers.

"These bunkers do not get affected by earthquake," he added.

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Pictures: Civil War Shipwreck Revealed by Sonar

Photograph by Jesse Cancelmo

A fishing net, likely only decades old, drapes over machinery that once connected the Hatteras' pistons to its paddle wheels, said Delgado.

From archived documents, the NOAA archaeologist learned that Blake, the ship's commander, surrendered as his ship was sinking. "It was listing to port, [or the left]," Delgado said. The Alabama took the wounded and the rest of the crew and put them in irons.

The officers were allowed to keep their swords and wander the deck as long as they promised not to lead an uprising against the Alabama's crew, he added.

From there, the Alabama dropped off their captives in Jamaica, leaving them to make their own way back to the U.S.

Delgado wants to dig even further into the crew of the Hatteras. He'd like see if members of the public recognize any of the names on his list of crew members and can give him background on the men.

"That's why I do archaeology," he said.

(Read about other Civil War battlefields in National Geographic magazine.)

Published January 11, 2013

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Poisoned Lottery Winner's Kin Were Suspicious

Urooj Khan had just brought home his $425,000 lottery check when he unexpectedly died the following day. Now, certain members of Khan's family are speaking publicly about the mystery -- and his nephew told ABC News they knew something was not right.

"He was a healthy guy, you know?" said the nephew, Minhaj Khan. "He worked so hard. He was always going about his business and, the thing is: After he won the lottery and the next day later he passes away -- it's awkward. It raises some eyebrows."

The medical examiner initially ruled Urooj Khan, 46, an immigrant from India who owned dry-cleaning businesses in Chicago, died July 20, 2012, of natural causes. But after a family member demanded more tests, authorities in November found a lethal amount of cyanide in his blood, turning the case into a homicide investigation.

"When we found out there was cyanide in his blood after the extensive toxicology reports, we had to believe that ... somebody had to kill him," Minhaj Khan said. "It had to happen, because where can you get cyanide?"

In Photos: Biggest Lotto Jackpot Winners

Authorities could be one step closer to learning what happened to Urooj Khan. A judge Friday approved an order to exhume his body at Rosehill Cemetery in Chicago as early as Thursday to perform further tests.

Lottery Winner Murdered: Widow Questioned By Police Watch Video

Moments after the court hearing, Urooj Khan's sister, Meraj Khan, remembered her brother as the kind of person who would've shared his jackpot with anyone. Speaking at the Cook County Courthouse, she hoped the exhumation would help the investigation.

"It's very hard because I wanted my brother to rest in peace, but then we have to have justice served," she said, according to ABC News station WLS in Chicago. "So if that's what it takes for him to bring justice and peace, then that's what needs to be done."

Khan reportedly did not have a will. With the investigation moving forward, his family is waging a legal fight against his widow, Shabana Ansari, 32, over more than $1 million, including Urooj Khan's lottery winnings, as well as his business and real estate holdings.

Khan's brother filed a petition Wednesday to a judge asking Citibank to release information about Khan's assets to "ultimately ensure" that [Khan's] minor daughter from a prior marriage "receives her proper share."

Ansari may have tried to cash the jackpot check after Khan's death, according to court documents, which also showed Urooj Khan's family is questioning if the couple was ever even legally married.

Ansari, Urooj Khan's second wife, who still works at the couple's dry cleaning business, has insisted they were married legally.

She has told reporters the night before her husband died, she cooked a traditional Indian meal for him and their family, including Khan's daughter and Ansari's father. Not feeling well, Khan retired early, Ansari told the Chicago Sun-Times, falling asleep in a chair, waking up in agony, then collapsing in the middle of the night. She said she called 911.

"It has been an incredibly hard time," she told ABC News earlier this week. "We went from being the happiest the day we got the check. It was the best sleep I've had. And then the next day, everything was gone.

"I am cooperating with the investigation," Ansari told ABC News. "I want the truth to come out."

Ansari has not been named a suspect, but her attorney, Steven Kozicki, said investigators did question her for more than four hours.

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Jay Rockefeller, likely the last of a political dynasty

Uncle Nelson was vice president. Uncle Winthrop a governor. Great-grandfather Nelson a senator.

Political bloodlines, he had.

But the great American electoral dynasty that abruptly announced its end Friday, or at least signaled what looks to be a long, long pause, always evoked more. That name on the ballot — Rockefeller — meant money. It meant epic-scale success. It meant everything.

And it meant that Jay Rockefeller wasn’t ever going to be just some Democratic senator from West Virginia. Rockefeller, who said Friday that he would not seek reelection in 2014 after nearly three decades in the Senate, was always going to be the oil titan John D. Rockefeller’s great-grandson, too. One of the heirs to a legendary fortune.

“He’s proud of being a Rockefeller. He talks about his uncles and his grandfather, about that legacy. It’s an important part of who he is and how he thinks about himself,” Rockefeller’s longtime political adviser, Geoff Garin, said in an interview. “He found a way to be a Rockefeller that was about serving people.”

Dynasties like these roll across American political history. Not just Rockefellers, but Adamses and Kennedys and Bushes. A nation formed to escape power granted as a birthright still embraces power that follows the contours of a family tree. Voters even expect it, and so do political scions.

“It’s so predictable!” said Stephen Hess, a Brookings Institution senior fellow emeritus and author of the book “America’s Political Dynasties.” “It’s daddy’s business and increasingly it’ll be mommy’s business, too.”

For Hess, each dynasty takes on a different aura. There were the “crafty” Roosevelts, headlined by a couple of presidents — Franklin Delano and Theodore — and his favorites, the Tafts, whose standout, William Howard, was about the “nicest” guy ever to occupy the Oval Office, in Hess’s estimation, and who also managed to become chief justice of the Supreme Court.

The Rockefellers were almost incidental dynasty builders, Hess said. “That generation — the robber barons, if you want to call them that — wasn’t interested in politics. Politics was something you could marry into.”

Indeed, John D. Rockefeller’s only son married the daughter of Nelson Aldrich, a prominent Republican senator of the late 1800s and early 1900s who wielded tremendous influence over monetary policies. Their son, Nelson Aldrich Rockefeller, became governor of New York and was Gerald R. Ford’s vice president. Another son, Winthrop Rockefeller, became governor of Arkansas.

“My great-grandfather, John D. Rockefeller, worked at it very, very hard. There’s an ethic in the Rockefeller family of hard work,” Jay Rockefeller wrote in an e-mail late Friday. “It’s expected that everybody work hard. And there has been a tradition of public service.”

John D. “Jay” Rockefeller IV entered politics unconventionally, drawn into that sphere by his experiences as a volunteer for VISTA (the precursor of Americorps) in Emmons, W.Va., a small coal mining town. “Coming to West Virginia was life-changing for him,” Garin said. “West Virginia exposed him to a whole new world that broadened his world; and in a lot of respects it gave his career a defining purpose.”

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More seeking social assistance at CDCs

SINGAPORE: Singapore's five Community Development Councils (CDCs) have seen an increase in the number of social assistance cases coming to them for help in 2012.

SINGAPORE: A key reason for this uptrend is the revision in the criteria of people who can now qualify for such help under the ComCare scheme.

The scheme was revised last year.

Among the changes - the income criteria for short and medium term assistance schemes have been revised and there are more pre-school and student care subsidies.

There are four key challenges which will shape the work of the CDCs in 2013 - an expected slowdown in economic growth in Singapore coupled with economic restructuring, preserving social mobility, a rapidly ageing population and the continued costs of living pressures.

For cleaner Tay Kheng Leong, a sole breadwinner earning about S$700 a month, schemes from the North East CDC have come in very handy for him to meet his daily and medical expenses for his family members, who live in a two-room rental flat.

Mr Tay said CDC has been giving him S$300 every month for more than a year. His children get free textbooks and school uniforms. He provides for his children's pocket money.

Between January and September 2012, the CDCs received close to 44,900 applications for help, an increase of 8.2 per cent compared to 2011. In 2011, there were 41,500 applications for the period between January and September.

Teo Ser Luck, mayor of North East CDC said: "There is the lower middle income (group) that we have to help. Based on the rising costs of living, some of them may be struggling, some of them may have a one-time expenditure which they could not handle or afford. These are the ones we look out for.

"But we have to make our schemes more readily available on the ground and accessible. That is why more resources would be put into the community, engaging the residents and helping the residents this year."

Dr Teo Ho Pin, mayor of North West CDC added: "This year we have set aside a budget of about S$3.5 million in our CDC funding to support the needy. What we want to do is to provide a more holistic approach to help the needy families to achieve self reliance.

"In the areas of social assistance services, we will be decentralising some of our service points. Secondly we will be improving our processing time. Today we are processing 99 per cent of our cases within four weeks. We are going to do it within two weeks, so that we can respond faster."

Dr Amy Khor, coordinating chairman of the mayors' council, feels more can be done to improve the accessibility and delivery of social assistance.

"The CDCs are also actually working to further enhance and improve the efficiency and effectiveness as well as accessibility of social assistance and social assistance delivery," said Dr Khor, who is also the mayor of South West CDC.

"We are looking at a standard referral form and protocol, as well as working closely with our partner agencies to ensure that no one falls through the cracks and that they can get targeted assistance which is needed, relevant and useful to them."

Sam Tan, mayor of Central Singapore CDC said: "In the past, there were many who lived in the one and two-room rental flats, they may not be able to read the newsletter, internet and so on. We have done a lot of outreach activities like doing home visits, working closely with the VWOs (voluntary welfare organisations), the seniors activity centres, asking them to recommend the probable and suitable (potential beneficiaries) so that we can get in touch with them."

But there may still be some who do not qualify for the schemes and who need some interim help.

"In our case we always take a more generous approach in that we always exercise flexibility for people who may just marginally, or for some reasons may have exceeded the criteria a little bit more," said Mr Tan.

"We always look at their family background to find if there are other justifying factors or reasons so that we can have reasons to offer the assistance to them, even though they may have exceeded the criteria."

"Definitely there are applicants who may not qualify, but they come forward. Some of them may know that outright they do not qualify," said Dr Khor.

"They may suffer pay cuts but they expect to maintain their standard of living. That can be a problem and so we need to counsel and explain to them. In some cases when they really do not qualify because of their income criteria, we may still assist them through our own local schemes, in various ways, may not be in cash assistance but other ways, in terms of training where they can get other jobs. Or for instance in terms of looking at their needs of their children."

The next focus area for the CDCs is the elderly, and a pilot programme is underway in Marine Parade to assess their needs.

Dr Mohamad Maliki Osman, mayor of South East CDC explained: "Marine Parade is where we pilot the concept of a city of all ages where we want to help the seniors ensure that they are able to age successfully with the younger generation.

"So we assess all the abilities of the elderly, whether they are wheelchair bound, whether they have visual difficulties. The whole of Marine Parade is assessed physically and at the same time they also look at the social infrastructure of Marine Parade to respond to the varying needs of senior citizens there. Hopefully if Marine Parade succeeds we will try to expand it to other towns."

When it comes to employment assistance, the picture at the CDCs is slightly different. The CDCs say the number of people coming to them for job referrals and employment matters has dipped slightly in 2012 compared to 2011. And one key reason for this fall in numbers is the tight job market in Singapore last year.

Between January and November 2012, the number of people approaching the CDCs for training and employment assistance was 24,500, a 3 per cent drop compared to the same period in 2011.

The success rates of those being placed into employment has also been higher in 2012. 11,800 were placed into jobs between January and November 2012, compared to 10,100 for the same period in 2011.

But if Singapore faces a recession, the mayors say they are ready with their help schemes, having gained from the experiences in 2003 and 2008.

- CNA/xq

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