Much of the progress in Iraq over the last two years came from deals with insurgent groups who had previously targeted American troops. Now President Obama is suggesting that the military might try to replicate its success there by trying to split the Taliban in Afghanistan. In an interview with The New York Times, Obama says: “There may be some comparable opportunities in Afghanistan and in the Pakistani region," where his generals believe negotiation could yield benefits. As for the economy, Obama declined to predict when it would finally pull out of its current slump but said he would “get all the pillars in place for recovery this year” so that the next economic expansion would run smoothly. Striking a balance between acknowledging the seriousness of the economic crisis and offering hope for the future, Obama called the downturn a "wrenching process" but encouraged Americans not be afraid to spend. “I don’t think that people should suddenly mistrust all of our financial institutions," Obama said, adding that people shouldn't “stuff money in their mattresses.”

The Israeli government sex scandal is moving to the courts: Former President Moshe Katsav is being indicted for rape and indecent acts, among other alleged sexual offenses. Katsav, first accused of assaulting female staffers in 2006 while serving in the Tourism Ministry, stepped down from the presidency in July 2007 amid controversy over further allegations. The former president had agreed to a plea bargain a month earlier to get the rape charge dropped in return for a guilty plea to sexual harassment and indecent acts, but last April he changed his mind, saying he preferred to stand trial. Israel’s attorney general announced today Katsav also will be charged with obstruction of justice.

Guess Treasury Secretary Tim Geithner took all that criticism about the empty desks in his department to heart: He now has three new assistant secretaries. Obama today announced the appointments of lawyer David Cohen, who’ll address terrorist financing; Princeton labor economist Alan Krueger, who’ll focus on economic policy; and former Barclays and Lehman executive Kim Wallace, who’ll tackle legislative affairs. “With the leadership of these accomplished individuals and our whole economic team, I am absolutely confident that we will turn around this economy and seize this opportunity to secure a more prosperous future,” the president said.

A day after the Yankees said Alex Rodriguez would play through a torn labrum and postpone hip surgery until after the Major League Baseball season, the team has announced he’ll have the operation much sooner—tomorrow. The arthroscopic procedure and rehabilitation will keep him off the field for six to eight weeks, and he’ll need more extensive surgery after the season. “It was Alex’s decision,” his doctor said. “But the Yankees were there all the way.” If Yankees third baseman returns to the Bronx eight weeks from tomorrow, he’ll be just in time for the first game in his team’s new stadium against its archrival, the Boston Red Sox.

In a deadly echo of the once-fierce violence in Northern Ireland, gunmen attacked an army base on Saturday night outside Belfast, killing two soldiers and injuring four others. British Prime Minister Gordon Brown has denounced the attack as "evil and cowardly" and pledged to forge ahead with peace negotiations in the province."No murderer will be able to derail a peace process that has the support of the great majority of Northern Ireland," he said. The shooting, believed to be the work of dissident republicans who favor a united Ireland, marked the first time soldiers had been murdered in Northern Ireland since 1997.

While high school seniors are typically a bundle of nerves this time of year, our Great Recession has given colleges similar levels of angst. Universities usually rely on statistical models to predict which students will accept their offers, but bargain-hunting families and changing demographics have changed all that. So colleges are trying new methods, but mostly they’re guessing—who’ll be feeling too poor to accept? Who’ll actually show up in August? “It’s a consumer confidence issue,” said a vice president for enrollment at Lawrence University in Wisconsin. “Families are feeling like they can’t afford it even if they’re in the same financial position they were three months ago.”

Let’s see what Rihanna fans think of this: Singer Chris Brown is trying to cut a deal and plead guilty to a misdemeanor to avoid jail time for his alleged assault of his pop star girlfriend. Brown has been charged with two felonies in last month’s attack, but TMZ reports Brown’s “people have consulted with outside legal eagles…who have said Rihanna’s own aggressiveness takes it out of the felony category.” Sources tell the website she was the first to strike, hitting him several times after seeing a text message from another woman. Not surprisingly, other “experts” are pouring cold water on Brown’s strategy.

Could the recession push the hot-button issue of illegal immigration out of the spotlight in America? The Los Angeles Times reports border arrests are down a whopping 24 percent in the last five months compared to the same period last year. One spokesman for the US Border Patrol said officers were "in shock" after a 126-mile section of the border saw no arrests at all for two days straight in December. Experts attribute the decline to a combination of increased border security measures and the weakened economy, which makes crossings less worth the trouble given fewer and less desirable jobs on the American side.

While observers tend to frame debates over military spending as a left vs. right issue, President Obama is likely to face a stiffer challenge from his own party in tackling out-of-control defense appropriations this year. The military is a notorious source for wasted cash—outdated weapons systems and no-bid contracts can move quietly through Congress with the support of pork-loving legislators looking to score score jobs for their constituents. "Too many contractors have been allowed to get away with delay after delay in developing unproven weapon systems," Obama said recently. It was Democrats, however, who larded a 2008 appropriations bill with an estimated $524 million in defense earmarks the Pentagon did not request, some $220 million more than Republicans did. Obama will have to face off with these lawmakers if he wants to reform spending.

During the Great Depression, kids were widely perceived as cautious, neurotic, and even outright boring as they matured, the result of their traumatic experience watching their country's most trusted institutions collapse. Now experts are wondering if today's crop of recession babies will be similarly affected should the economic downturn prove truly severe and prolonged, The New York Times reports. Part of the answer might depend on the age of the kids in question—in the Great Depression, for example, the older children were able to understand and adapt to tough times better than their younger, more victimized, siblings, and benefited from their later military experience in World War II. The parallels may be difficult to understand for decades, as much depends on the attitudes of parents and children today, whose outlook may prove drastically different than that of the Depression generation. “The impact depends on the context and the mood of the time and how children understand the spirit of the times,” author Neil Howe told the paper.

While Iraqis and Americans are celebrating reduced violence in Iraq over the last two years, Oxfam is warning that these gains are failing to reach millions of women struggling with poverty and abuse. According to a survey by Oxfam, more than 20 percent of Iraqi widows have been victims of domestic violence and nearly half said they had seen declines in health care over the last two years and that they were getting poorer. A statement from the organization labeled the conditions a "silent emergency," trapping women in a "downward spiral of poverty, desperation and personal insecurity despite an overall decrease in violence in the country."

Back when he was an NBA star, Charles Barkley famously told fans he was "not a role model." Ironically, the man he specifically cited instead as a "role model for all Americans," Sheriff Joe Arpaio of Arizona, is now overseeing the former basketball genius' three-day stint in prison for drunk driving. Barkley's praise for Arpaio made it onto the book jacket of the sheriff's 1996 tome America's Toughest Sheriff. Barkley currently works as a basketball commentator for TNT, where his reputation for outrageous and unpredictable behavior has given him a popular second career. He has taken a leave of absence from work since being arrested on New Year's Eve.

Embattled RNC chair Michael Steele is on the press circuit again. In a new interview with the New York Times, Steele acknowledges his detractors—"You can say 'He's crazy, he's running off at the mouth,' or you can say, 'It kind of makes sense, and I get it'"—and then tosses them a few more mixed metaphors, including one where he says his party is self-defeating and stuck. Describing his job as RNC chair, Steele said, "I'm trying to move an elephant that's become mired in its own muck." Since becoming chairman, Steele has made himself a gaffe-flinging sideshow, including his promise of a "hip-hop makeover" to make the GOP appeal to minorities and "one-armed midgets" alike. Recently he insulted and apologized, in rapid succession, to Rush Limbaugh (who continues to ridicule Steele in his radio show). NYT's profile is as much a mixed bag as Steele may be to the Republican party: "He has often been a victim of his own impetuousness," the profile says, noting Steele's habit of "pausing whenever [his own image] appeared on the giant television close by his desk." Steele says he would like to go on the Colbert Report and compares himself to a roller coaster: "Be prepared; you have no idea. Just buckle up and get ready to go."

For a woman with the power the shift the world's news cycle, Nadya Suleman sure has trouble with representation. Last night Us Weekly reported that the Octo-mom has burned through and alienated her second publicist in one month. Victor Munoz explained, "It just got to be too much.... Nadya got real greedy. The woman is nuts. This I can say: what ultimately destroyed the business arrangement was personal reasons." Munoz may be looking for representation of his own, soon: Us Weekly reports that he is consulting lawyers on the ins and outs of his confidentiality clause.  Munoz's resignation comes on the heels of reports that Suleman is negotiating in the seven-figure range for rights to a video recording of the octuplet's birth. Suleman's first publicist quit relatively early in the octo-saga due to threats on her personal safety.

They don't just leap tall buildings in a single bound: Superheroes earn big, too. In its first day in theaters, Watchmen earned $24.9 million on Friday. The CGI-heavy flick hit 3,611 locations on its first day, setting the record for the widest-ever release for an R-rated movie. Director Zack Snyder's last blockbluster, 300, earned a hefty $28.1 million the day of its release, although it had fewer people lined up for its first midnight screenings and was also 45 minutes shorter. Box office watchers are now waiting to see if Watchmen can beat 300's massive first-weekend gross of $70.9 million—and if any movie will get close to Slumdog Millionaire's decidedly un-slummy gross intake which passed $120 million mark this week, and it's still in theaters.