Falling dollar pushing up costs of outsourcing to India

Dollar In Free Fall. Who Profits?

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The level of the dollar - often regarded as a barometer of the U.S. economy's health - dropped to $1.4120 against the euro during business hours in Asia, reaching an all-time low for a second consecutive day.

It also slipped against a number of other major currencies on speculation that the U.S. Federal Reserve would keep cutting interest rates as the world's largest economy weakens.

Sentiment soured for the dollar after Ben Bernanke, chairman of the Federal Reserve, stoked speculation that he might continue to lower rates following this week's aggressive trim of half a percentage point. Bernanke said Thursday that the sell-off in credit markets could make the housing recession more severe.

The dollar recovered somewhat during European trading, but investors believe that the currency will continue to lose ground, as it has for much of the past six years.

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Oil Hits New High Over $82 On Supply Fears

Housing layoffs

Repeal the Bush Tax Cuts While You're At It

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First, he asked, "How can we improve the economy of the United States of America?" Second, he wants to "make sure there is a sense of fairness" to the tax code.

The key, Rangel made clear, is that any tax reform proposal should assume that Congress will eliminate the alternative minimum tax.

That tax is hitting harder at middle-income families and must be abolished, he said. "We have a responsibility to address the problem presented by the AMT," he said.

But eliminating the unpopular AMT would cost federal coffers $872 billion over 11 years, leaving Congress with no choice but to offset the loss. "We have to look at the entire tax code," Rangel said.

Congress created the AMT in 1969 to ensure that the wealthiest Americans would pay at least some taxes, even if they made extensive use of tax shelters and loopholes.

But because the AMT failed to take inflation into account, it hits more and more families that take deductions and exemptions for mortgages and children. For example, in the 2007 tax year, the AMT would be triggered if a typical tax filer with four dependent children had income of just $56,841.

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Oil Price Threatens US Economy

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Analysts say that a price rise above $80 is inevitable, raising concerns about the effect of energy costs on inflation.

Higher oil prices drive up the costs for businesses who pass those increases on to customers. And with the price of petrol at the pump close to $3 a gallon, it is feared that higher fuel bills will begin to dent consumer spending.

Mr Bodman said that the high oil prices had inflicted only a "modest" impact on the economy but he was unsure that this was sustainable.

"I am concerned that where we are operating, in the ranges that we're talking about now," Mr Bodman said.

"I am concerned for each uptick (in price)."

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Japanese firm Nippon Oil is to start paying for Iranian oil in yen, rather than in US dollars.

Iran has been increasingly selling oil in currencies other than the US dollar, which has fallen in value.

Iran, the fourth-biggest oil exporter, has made the shift in the light of political differences with the US over its nuclear programme.

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