SEEING RED: As promised, Prime Minister Stephen Harper's government delivered a budget thick with red ink -- a projected $85 billion in deficits by 2013 -- meant to breathe new life into Canada's staggering economy. Among the highlights of the budget were cuts to personal income taxes worth as much as $20 billion over six years, cuts to business taxes worth $2 billion over the same period and almost $8 billion in social housing and private home renovation.


The item that arguably received the most attention was a plan to pour nearly $12 billion into infrastructure spending in an effort to save jobs, however the plan came with the expectation that other governments would match the investment, something to which the Ontario government has already hinted he would accept. As for jobs that have already been lost, the governments committed further billions to skills training and extended the number of weeks Canadians will be eligible for employment insurance.


SO, WE'RE GOOD RIGHT?: Unsurprisingly, the NDP and Bloc Quebecois immediately dismissed the budget, declaring that the Harper government could not be trusted after predicting a surplus as recently as November. All eyes turned to Liberal Leader Michael Ignatieff, who holds the fate of the Conservative government and the coalition that is angling to replace it in his hands. Ignatieff said he was genuinely torn about the decision and initial reports said the Liberal leader was staring down a "grumpy" caucus. One senior Liberal said the only two options were "a flat no or an amendment."


An irate Newfoundland and Labrador Premier Danny Williams, a prominent Harper foe, publicly called for the federal Liberals to defeat the budget because, he said, its planned changes would "cripple" the province's economy. Williams said the proposal was "a good indication of the punitive, vindictive, nasty side of this prime minister." Also unhappy about the proposed changes was Quebec Finance Minister Monique Jerome-Forget, who said the new formula would cost her province dearly.


REACHING OUT: U.S. President Barack Obama was also busy drumming up support for his own economic rescue plans, spending the day wooing Congressional Republicans into supporting his proposed $850-billion stimulus package. Republicans have complained that the proposed bill relies too heavily on government spending and does not contain enough tax relief, but also said they were pleased that the president came to the capital to court them.

President Obama extended an olive branch to the Muslim world, as well. In his first official interview as president, Obama told Dubai-based Al-Arabiya that the U.S. was not an enemy of the region. Obama, who endured a barrage of accusations that he was a "secret Muslim" during the campaign, spoke openly about Muslim members of his family and his experiences living in Muslim countries.

RATTLING THE CAGE: The fragile Gaza ceasefire was shaken when a roadside bomb killed an Israeli soldier, to which Israel responded with an airstrike that wounded a Hamas militant. The flare up of violence came on the eve of the arrival of a special U.S. Middle East envoy, and on a day that the Chairman of the Joint Chiefs of Staff said he believed Iranian arms were being smuggled to the area.

EIGHT IS ENOUGH: The octuplets born to a Southern California woman were all said to be doing "very, very well" by the medical team that is looking after the suddenly large family. The newborns were only the second set of octuplets to be born alive in the United States and were tended to by a phalanx of doctors and nurses who were initially expecting to deliver seven children.