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White House: 10 percent jobless rate ahead

WASHINGTON, July 2 (UPI) -- The U.S. unemployment rate will climb to at least 10 percent "in the next two to three months," a White House spokesman said Thursday.

White House spokesman Robert Gibbs -- speaking hours after the government reported the economy lost 467,000 last month and the unemployment rate rose to 9.5 percent -- said the administration is confident the economic recovery plan will work and he called income growth a hopeful sign. But he said job losses will continue.

"In the next two to three months, I think, it's quite clear that we'll hit that number … We're definitely headed toward 10 percent," he said.

Gibbs noted the economy must create about 150,000 jobs a month just to retain the same unemployment rate. He said the average monthly job loss had dropped to 436,000 for the most recent quarter, compared with nearly 700,000 for the one immediately preceding it.

"There is a sense that the beginnings of stabilization are taking hold," Gibbs said.

He said 1,900 construction projects are in progress as a result of the recovery plan.

The White House, he said, will keep a close watch on the California budget crisis and on other states struggling with the economic downturn. Gibbs confirmed California had sought emergency aid from the U.S. Treasury Department and said the administration would consider proposals from other states.

He said about $144 billion in federal healthcare and education funding is already going directly to states.

"But obviously, each of these states, like is happening at kitchen tables across the country and in Washington, we're all going to have to make some very, very tough choices," Gibbs said.

Marshals seize Madoff's NYC penthouse

NEW YORK, July 2 (UPI) -- Federal marshals seized Ruth Madoff's New York apartment Friday along with the contents of the Manhattan duplex she shared with her swindling husband.

After changing the locks, the five marshals began an inventory of the contents, the New York Daily News reported. The apartment alone, a four-bedroom penthouse on East 64th St., is said to be worth $7 million.

"We are here to officially seize the property," one of the marshals said.

Madoff, 68, agreed last week to forfeit most of her property, keeping $2.5 million.

Bernard Madoff, 71, was sentenced to 150 years in prison Monday.

The News, citing a source in law enforcement, said Ruth Madoff was on the premises when the marshals arrived, quietly surrendered the apartment and left.

Bernard Madoff's Ponzi scheme defrauded investors of billions of dollars. His wife, who worked with him for decades but said she knew nothing of the fraud, had about $70 million in assets in her name, including houses in Palm Beach, Fla., and the Hamptons in New York, as well as two yachts, the newspaper said.

Sanford cleared of misuse of S.C. funds

COLUMBIA, S.C., July 2 (UPI) -- Gov. Mark Sanford's travel records indicated no misuse of state funds to visit his mistress, the top South Carolina law enforcement official said Thursday.

The governor released 44 pages of documents, including credit card statements and records of both personal and government trips, The Washington Post reported. Reggie Lloyd, director of the state Law Enforcement Division, said a review "found absolutely no misuse of funds."

Sanford has reimbursed the state $3,303.58 for part of his expenses during an official visit to Brazil and Argentina. He spent some time during that trip last year with Maria Belen Chapur.

The governor planned to spend the July Fourth weekend with his wife and four children at her parents' home in Florida. Jenny Sanford released a statement Thursday saying her husband's conduct was "inexcusable" and rebuilding trust with his family and constituents will take a long time.

"Mark showed a lack of judgment in his recent actions as governor," she said. "However, his far more egregious offenses were committed against God, the institutions of marriage and family, our boys and me."

Judge dismisses case against cyber bully

LOS ANGELES, July 2 (UPI) -- A federal judge in Los Angeles Thursday dismissed charges against Lori Drew, the Missouri woman whose online deception had been blamed for a teenager's suicide.

U.S. District Judge George Wu said the three misdemeanor counts Drew was convicted of would apply to anyone who violated a Web site's terms of service statement, the St. Louis Post-Dispatch reported.

Drew, 50, was scheduled to be sentenced Thursday. Wu had postponed the sentencing in May, saying he needed more time to consider a defense motion to dismiss the charges.

Drew was allegedly involved in creating a fictitious character on MySpace, "Josh Evans," who befriended Megan Meier, 13, a neighbor of Drew's in suburban St. Louis and a former friend of Drew's daughter. "Josh" eventually turned on Megan, and she hanged herself after receiving a message: "The world would be a better place without you."

Prosecutors and Megan's parents asked Wu in May for a 3-year sentence, citing Drew's "callousness" and the deadly consequences of her behavior. Drew had also been charged with felony conspiracy, but was acquitted.

After Megan's suicide, prosecutors in Missouri found no laws covering online bullying or harassment. Drew was charged in Los Angeles because MySpace is headquartered in Southern California.