Obama says failure to reach fiscal deal would hurt markets






WASHINGTON (Reuters) – Financial markets would be affected adversely if U.S. lawmakers fail to agree on a “fiscal cliff” deal before Tuesday, President Barack Obama said in an interview broadcast on Sunday, while urging Congress to act quickly to extend tax cuts for middle-class Americans.


Lawmakers are seeking a last-minute deal that would set aside $ 600 billion in tax increases and across-the-board government spending cuts that are set to start within days. If Congress does not make that happen, the first bill brought up in the new year would be to reduce taxes for middle-income families, Obama told NBC’s “Meet the Press.”






“Now I think that over the next 48 hours, my hope is that people recognize that, regardless of partisan differences, our top priority has to be to make sure that taxes on middle-class families do not go up. That would hurt our economy badly,” Obama said in the interview taped on Saturday.


“We can get that done. Democrats and Republicans both say they don’t want taxes to go up on middle-class families. That’s something we all agree on. If we can get that done, that takes a big bite out of the ‘fiscal cliff.’ It avoids the worst outcomes,” Obama added.


Low income tax rates first put in place under Republican former President George W. Bush are due to expire at the end of the day on Monday – the last day of 2012.


Obama said that failing to reach a deal would have a negative impact on financial markets.


“If people start seeing that on January 1st this problem still hasn’t been solved, that we haven’t seen the kind of deficit reduction that we could have had had the Republicans been willing to take the deal that I gave them … then obviously that’s going to have an adverse reaction in the markets,” he said.


RARE SENATE SESSION ON SUNDAY


Obama met with congressional leaders at the White House on Friday and declared himself cautiously optimistic about the chances of an agreement, but he noted in the interview that nothing had materialized since then.


“I was modestly optimistic yesterday, but we don’t yet see an agreement. And now the pressure’s on Congress to produce,” he said.


The Senate is scheduled to hold a rare Sunday session beginning at 1 p.m. EST (1800 GMT), but it was not clear whether the chamber would have fiscal-cliff legislation to act upon.


Obama sketched out what he believed to be the most likely scenarios the end the back-and-forth between both sides. Either the congressional leaders would come up with a deal, or Democrats in the Senate would bring a bill to the floor seeking an up-or-down vote to extend tax cuts for middle income earners.


“And if all else fails, if Republicans do in fact decide to block it, so that taxes on middle class families do in fact go up on January 1st, then we’ll come back with a new Congress on January 4th and the first bill that will be introduced on the floor will be to cut taxes on middle class families,” he said.


Obama chided Republicans for resisting his call for tax rates to go up for the top two percent of U.S. earners despite what he viewed as significant compromises on his part to cut spending and reform expensive social programs for the poor and elderly.


“They say that their biggest priority is making sure that we deal with the deficit in a serious way, but the way they’re behaving is that their only priority is making sure that tax breaks for the wealthiest Americans are protected. That seems to be their only overriding, unifying theme,” Obama said.


“The offers that I’ve made to them have been so fair that a lot of Democrats get mad at me. I mean I offered to make some significant changes to our entitlement programs in order to reduce the deficit,” he said.


(Reporting by Jeff Mason; Editing by David Brunnstrom)


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Last-minute fiscal cliff talks in Senate


WASHINGTON (AP) — Senate leaders groped for a last-minute compromise Saturday to avoid middle-class tax increases and possibly prevent deep spending cuts at the dawn of the new year as President Barack Obama warned that failure could mean a "self-inflicted wound to the economy."


Obama chastised lawmakers in his weekly radio and Internet address for waiting until the last minute to try and avoid a "fiscal cliff," yet said there was still time for an agreement. "We cannot let Washington politics get in the way of America's progress," he said as the hurry-up negotiations unfolded.


For all the recent expressions of urgency, bargaining took place by phone, email and paper in a Capitol nearly empty except for tourists. Alone among top lawmakers, Senate Republican leader Mitch McConnell spent the day in his office.


In the Republicans' weekly address, Sen. Roy Blunt of Missouri cited a readiness to compromise. "Divided government is a good time to solve hard problems — and in the next few days, leaders in Washington have an important responsibility to work together and do just that," he said.


Even so, there was no guarantee of success, and a dispute over the federal tax on large estates emerged as yet another key sticking point alongside personal income tax rates.


In a blunt challenge to Republicans, Obama said that barring a bipartisan agreement, he expected both houses to vote on his own proposal to block tax increases on all but the wealthy and simultaneously preserve expiring unemployment benefits.


Political calculations mattered as much as deep-seated differences over the issues, as divided government struggled with its first big challenge since the November elections.


Speaker John Boehner remained at arms-length, juggling a desire to avoid the fiscal cliff with his goal of winning another term as speaker when a new Congress convenes next Thursday. Any compromise legislation is certain to include higher tax rates on the wealthy, and the House GOP rank and file rejected the idea when he presented it to them as part of a final attempt to strike a more sweeping agreement with Obama.


Lawmakers have until the new Congress convenes to pass any compromise, and even the calendar mattered. Democrats said they had been told House Republicans might reject a deal until after Jan. 1, to avoid a vote to raise taxes before they had technically gone up and then vote to cut taxes after they had risen.


Nor was any taxpayer likely to feel any adverse impact if legislation is signed and passed into law in the first two or three days of 2013 instead of the final hours of 2012.


Gone was the talk of a grand bargain of spending cuts and additional tax revenue in which the two parties would agree to slash deficits by trillions of dollars over a decade.


Now negotiators had a more cramped goal of preventing additional damage to the economy in the form of higher taxes across the board — with some families facing increases measured in the thousands of dollars — as well as cuts aimed at the Pentagon and hundreds of domestic programs.


Republicans said they were willing to bow to Obama's call for higher taxes on the wealthy as part of a deal to prevent them from rising on those less well-off.


Democrats said Obama was sticking to his campaign call for tax increases above $250,000 in annual income, even though he said in recent negotiations he said he could accept $400,000. There was no evidence of agreement even at the higher level.


There were indications from Republicans that estate taxes might hold more significance for them than the possibility of higher rates on income.


One senior Republican, Sen. Jon Kyl of Arizona, said late Friday he was "totally dead set" against Obama's estate tax proposal, and as if to reinforce the point, Blunt mentioned the issue before any other in his broadcast remarks. "Small businesses and farm families don't know how to deal with the unfair death tax_a tax that the president and congressional leaders have threatened to expand to include even more family farms and even more small businesses," he said.


Several officials said Republicans want to leave the tax at 35 percent after exempting the first $5 million in estate value. Officials said the White House wants a 45 percent tax after a $3.5 million exemption. Without any action by Congress, it would climb to a 55 percent tax after a $1 million exemption on Jan. 1.


Democrats stressed their unwillingness to make concessions on both income taxes and the estate tax, and said they hoped Republicans would choose which mattered more to them.


Officials said any compromise was likely to ease the impact of the alternative minimum tax, originally designed to make sure that millionaires did not escape taxation. If left unchanged, it could hit an estimated 28 million households for the first time in 2013, with an average increase of more than $3,000.


Taxes on dividends and capital gains are also involved in the talks, as well as a series of breaks for businesses and others due to expire at the first of the year.


Obama and congressional Democrats are insisting on an extension of long-term unemployment benefits that are expiring for about 2 million jobless individuals.


Leaders in both parties also hope to prevent a 27 percent fee cut from taking effect on Jan. 1 for doctors who treat Medicare patients.


There was also discussion of a short-term extension of expiring farm programs, in part to prevent a spike in milk prices at the first of the year. It wasn't clear if that was a parallel effort to the cliff talks or had become wrapped into them.


Across-the-board spending cuts that comprise part of the cliff were a different matter.


Republicans say Boehner will insist that they will begin to take effect unless negotiators agreed to offset them with specified savings elsewhere.


That would set the stage for the next round of brinkmanship — a struggle over Republican calls for savings from Medicare, Medicaid and other federal benefit programs.


The Treasury's ability to borrow is expected to expire in late winter or early spring, and without an increase in the $16.4 trillion limit, the government would face its first-ever default. Republicans have said they will use administration requests for an extension as leverage to win cuts in spending.


Ironically, it was just such a maneuver more than a year ago that set the stage for the current crisis talks over the fiscal cliff.


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Nintendo’s Wii U wobbles as sales sink






According to Famitsu, Nintendo’s (NTDOY) portable 3DS console continued to see huge success during the week ahead of Christmas. It racked up sales of 433,000 units in Japan, up from 333,000 units in the prior week. But weirdly enough, the brand new and heavily promoted Wii U home console wobbled badly as its weekly sales slipped to 122,000 units from 130,000 units in the previous week. This may have been the biggest week in Japanese console market in 2012, so the stakes were high.


[More from BGR: Google names 12 best Android apps of 2012]






To put Wii U performance in context, the old PSP portable console sold 58,000 units in Japan during the same week. It is not an encouraging sign that the more than half-decade old PSP (which was displaced by the PlayStation Vita a year ago) managed to sell nearly half as many units as the brand new Wii U during the holidays. Of course, PS Vita continues to miss sales expectations dramatically — it sold only 19,000 units last week, barely more than a quarter of what its predecessor managed.


[More from BGR: Smartphones will replace keys on upcoming Hyundai cars]


Wii U performance may improve dramatically once compelling titles arrive. But during December, it did have “New Super Mario Brothers” and “Nintendo Land” to boost it in Japan. This clearly wasn’t enough. The aging PlayStation 3 sold only 30,000 units and Microsoft’s (MSFT) Xbox 360 barely cleared a thousand units, so the Wii U should have had a clear shot at strong sales performance in the Japanese home console market.


Overall, Japanese game console sales were down sharply from the week ahead of Christmas in 2011. The 3DS is a big hit in 2012 but instead of buoying the entire console market, it seems to be sapping energy from the Wii U and PS Vita.


It’s still early days for the Wii U, but Nintendo has probably started sweating a bit.


This article was originally published by BGR


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Suspected US drone kills 3 al-Qaida men in Yemen






SANAA, Yemen (AP) — Three al-Qaida militants were killed in a suspected U.S. drone strike in southern Yemen, Yemeni security officials said, the fourth such attack this week and a sign attacks from unmanned aircraft are on the upswing in the country.


The officials said the three men were hit as they were riding in a Land Cruiser in el-Manaseh village on the outskirts of Radda in Bayda province. Dozens of local al-Qaida-linked fighters protested the drone strikes after traditional Islamic Friday prayers.






Earlier this week another suspected U.S. drone strike killed two militants in Radda itself, Yemeni security officials say, and seven were killed in two other strikes in the southeastern province of Hadramawt. Four suspected drone strikes a week is uncommon in Yemen.


According to statistics gathered by the Long War Journal before Saturday’s attacks, the United States “is known to have carried out 41 airstrikes” this year against al-Qaida in the Arabian Peninsula (AQAP), as the group’s branch in Yemen is known. That makes for an average of around three to four strikes per month.


The Journal, a product of the Foundation for Defense of Democracies that was founded by former U.S. officials, says that since December 2009, the CIA and the US military’s Joint Special Operations Command are known to have conducted at least 54 air and missile strikes inside Yemen, excluding Saturday’s suspected attack.


AQAP overran entire towns and villages — including Radda — last year by taking advantage of a security lapse during nationwide protests that eventually ousted the country’s longtime ruler. Backed by the U.S. military, Yemen’s army was able to regain control of the southern region but al-Qaida militants continue to launch deadly attacks on security forces that have killed hundreds.


Also on Saturday, two gunmen on a motorbike shot and killed an intelligence officer in the southeast, security officials said. They said that the officer, Mutea Baqutian, was on his way to work in Mukalla, capital of Hadramawt province, when the men stopped his car, gunned him down, and fled.


The government has blamed al-Qaida militants for similar assassinations of several senior military and intelligence officials this year. The bullet-riddled body of Major al-Numeiry Abdo al-Oudi, deputy director of the security department of al-Qitten in Hadramawt, was found in the town’s suburbs last week. He had been kidnapped earlier in the month.


All officials spoke on condition of anonymity according to regulations.


Meanwhile, Maj. Gen. Ahmed Seif, who is commander of Yemen’s central military region, said the Defense Ministry has deployed an infantry brigade in the northeastern province of Marib to stop armed tribesmen who maintain cordial ties with al-Qaida from attacking oil pipelines and power generating stations, as well as to counter al-Qaida militants.


State TV meanwhile aired a meeting between President Abed Rabbo Mansour Hadi and eight Yemeni sailors who were rescued last week by forces of Somalia’s semiautonomous Puntland region after being held for nearly three years by Somali pirates.


The Puntland government says that its forces captured the hijacked Panama-flagged MV Iceberg 1 on Sunday after a siege that lasted two weeks. They freed the eight Yemeni sailors together with five Indians, two Pakistanis, four Ghanaians, two Sudanese and a Filipino. The ship was hijacked March 29, 2010.


Hadi congratulated the eight sailors for their safety and ordered the government to compensate them for their suffering.


Eqbal Yassin, a relative of one of the freed sailors, told The Associated Press that the hijackers had allowed some sailors to phone their relatives and convey the pirates’ demand for $ 5 million ransom. He said he was told by his relative that the hijackers killed a Yemeni sailor who tried to escape. He gave no further details.


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Michigan hospital blazes trail in fight against fungal meningitis






CHICAGO (Reuters) – After his first day working at St Joseph Mercy Ann Arbor hospital’s newly created Fungal Outbreak Clinic, Dr David Vandenberg struggled to describe to his boss the enormity of what lay ahead. He settled on a line from the movie Jaws.


“We’re going to need a bigger boat,” Vandenberg told Dr Lakshmi Halasyamani, chief medical officer of the Michigan hospital, echoing the film’s local police chief after he first eyes a 25-foot (7.5-metre) killer shark.






The St Joseph Mercy clinic has been at the front line of the fight against one of the biggest ever U.S. outbreaks of fungal meningitis, a killer infection that has been traced to tainted steroid shots from a Massachusetts pharmacy.


So far, 620 Americans have developed serious infections related to the outbreak, including 367 cases of deadly meningitis, and 39 people have died. Of the 19 U.S. states affected, Michigan has been worst hit, handling more than one third of the total cases in the outbreak.


St Joseph Mercy – a 537-bed Catholic hospital located in Ypsilanti, on the doorstep of the University of Michigan – has treated 169 of the state’s 223 cases of infections that can cause meningitis, including 7 people who died.


At one point it was so overrun that 87 of its 537 beds, which are usually occupied by patients with cancer or heart ailments and the like, were occupied by patients with fungal meningitis and related infections.


Dr Tom Chiller, the fungal disease expert at the U.S. Centers for Disease Control and Prevention, who has been overseeing the outbreak, praised the work of the hospital in helping to limit deaths from the outbreak.


“They have been incredibly creative in dealing with these complicated patients,” he said.


In all, almost 14,000 people seeking relief from back and joint pain received injections from moldy steroid shots made at the now-bankrupt New England Compounding Center in Massachusetts before they were recalled in late September.


CDC experts initially feared death rates in the 40 to 50 percent range; instead, only about 6 percent of those infected have died, and the CDC credits the creative and dogged efforts of state and local health officials for keeping the death rates so low.


The first wave of the outbreak involved the most severe cases of meningitis – an inflammation of the membranes that cover the brain and spinal cord. But starting in mid-October, patients who had been recovering from meningitis were developing potentially fatal localized infections near the site where contaminated drug was injected to treat back or neck pain.


As they started seeing more cases of these local, secondary infections, the staff at St Joseph‘s devised a bold plan to screen all patients in their database looking for potential new infections that might have been missed in the first wave.


On December 20, the CDC issued an alert to doctors incorporating some of lessons learned by the efforts of doctors at St Joseph’s and other hospitals, calling for increased screening of patients who may be harboring localized infections.


A BEWILDERING FUNGI


Among the patients who developed secondary infections was Bonita Robbins, a 72-year-old retired nurse from Pinckney, Michigan, who received doses of the tainted drug at the Michigan Pain Specialists clinic in the nearby town of Brighton while seeking relief for lower-back pain.


The first shot brought some relief, the second did little to ease her aches, and the third was contaminated. In October, Robbins went to St Joseph’s with a severe headache, back pain and pain in her thighs.


She spent 37 days in the hospital taking two kinds of antifungal drugs.


Dr Anurag Malani, an infectious disease specialist treating Robbins, said the challenge with the outbreak was that there was no medical literature to fall back on.


“No one has ever seen anything of this magnitude related to fungal infections, ever,” he said.


Chiller said U.S. doctors had never treated meningitis caused by Exserohilum rostratum, the environmental mold causing most of the infections.


“It’s just a rare, rare cause of infection.” Seeing that mold in the meninges – membranes covering the brain and spinal cord – is “completely new.”


Initially, St Joseph’s Fungal Outbreak Clinic was started in order to coordinate the care of patients after their discharge, which included overseeing the administration of a complex regime of anti-fungal drugs.


It morphed into something bigger when some of its 53 patients with meningitis started returning with infections near the site in their back or neck where the contaminated drug was injected.


Then came a wave of patients like Robbins, who had been ruled out for meningitis with a spinal tap, but were still complaining of pain near their injection site.


GETTING THE ‘BIGGER BOAT’


“When it became obvious that the number of patients would be a much higher percentage than anticipated by the CDC, we expanded our clinic and started enlisting the help of several other hospitals,” Vandenberg said.


Many of the patients had spinal abscesses, an infection in the space between the outside covering of the spinal cord and the bones of the spine. Others developed arachnoiditis, an infection of nerves within the spinal canal.


The decision to screen all patients in the hospital database who might have received tainted injections was not taken at the recommendation of the CDC.


“That was our own decision,” said Vandenberg, a specialist in internal medicine overseeing the screening effort.


He admitted that the strategy was aggressive, but said that, especially early on, doctors feared the local infections might be precursors to meningitis, making catching them early a potentially life-saving move.


Excluding patients who had already been screened and those who had injections in areas other than the spine, the hospital targeted about 500 patients for MRI scans.


Most so far have had private insurance that covers the screening. For the uninsured, the hospital’s Patient Financial Services department has been helping them to apply for financial support.


“We did over 400 MRIs in about a 4-week period,” Vandenberg said. The hospital screened so many patients, in fact, that the state of Michigan sent in an emergency mobile MRI unit to help.


Vandenberg got the task of reading stacks of MRI reports, sometimes as many as 30 a day.


So far, about 20 percent of the MRIs have shown up as abnormal, meaning that patients have to come back for surgery and treatment.


Vandenberg makes all of those calls personally. Not all of them go smoothly. He likens the gravity of the conversation – learning you have a potentially deadly new disease that requires months of treatment with risky drugs – to telling someone they have cancer.


After one especially tough call, in which a heart patient feared he would not survive the surgery he would need to clear his infection, Vandenberg cracked.


“I started crying. I probably haven’t cried for 15 years.”


SIGNS OUTBREAK IS EASING


But at last, after months of onslaught, there are signs the outbreak is easing.


Attendance at the hospital’s daily support group has begun to taper off. And since the beginning of December, more than 50 patients with fungal infections have been discharged, while only 20 have been admitted, bringing the total number of fungus-related inpatient to 30.


Vandenberg nevertheless cautions that the outbreak is still far from over.


“Every single day of this screening program, we’re finding one or two cases that are abnormal and need to be admitted,” he said.


Vandenberg gave the CDC access to the clinic’s database so the agency could see how the effort turned out, and this month, the CDC issued the alert to doctors incorporating some of the results of the MRI screening program.


The alert warned that some patients who got tainted injections but did not develop meningitis may still be at risk of localized infections.


And it urged doctors to consider ordering an MRI for all patients who still have pain, even if the pain is similar to what sent them in for treatment in the first place.


Chiller said the United States had not yet reached the end of the outbreak.


“Unfortunately, with fungi, the incubation periods are so long and they can remain indolent. I’m definitely concerned that we’re going to continue to see more cases.”


(Reporting by Julie Steenhuysen; Editing by Jilian Mincer, Mary Milliken and David Brunnstrom)


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Hot spots draw believers, but not doomsday






As the sun rose from time zone to time zone across the world on Friday, there was still no sign of the world’s end — but that didn’t stop those convinced that a 5,125-year Mayan calendar predicts the apocalypse from gathering at some of the world’s purported survival hot spots.


Many of the esoterically inclined expected a new age of consciousness — others wanted a party. But, in some places said to offer salvation from the end, fewer people showed up than officials had predicted — much to the disappointment of vendors hoping to sell souvenirs.






Here are some key places being marked by the fascination over doomsday rumors:


MEXICO


In an area of Mexico that was once the ancient Mayan heartland, spiritualists gathered in the darkness before dawn on Friday to prepare white clothes, drums, conch shells and incense. They believed the sunrise would herald the birth of a new and better age as a vast cycle in the Mayan calendar comes to an end.


Many people who came to Yucatan for the occasion were already calling it “a new sun” and “a new era.”


FRANCE


According to one rumor, a rocky mountain in the French Pyrenees will be the sole place on Earth to escape destruction. A giant UFO and aliens are said to be waiting under the mountain, ready to burst through and spirit those nearby to safety. But there is bad news for those seeking salvation: French gendarmes, some on horseback, blocked outsiders from reaching the Bugarach peak and its village of some 200 people.


Eric Freysselinard, head of local government, said the security forces had “partially stopped the new age enthusiasts as well as curious people from coming to the area.”


Meanwhile, some Bugarach residents dressed up like aliens, with tinfoil costumes and funnels and fake antenna on their heads, strolling around their village Friday to make light of the rumored UFO prophecy.


RUSSIA


Doomsday rumors have prompted some people across Russia to stock up on candles, water, canned foods and other non-perishable foods. The apocalypse has proven a good business, with some shops selling survival aid packages that include soap and vodka.


In Moscow, salvation has also been promised in the underground bunker for the former Soviet dictator Josef Stalin — with a 50 percent refund if nothing happens. An underground stay was originally priced at 50,000 rubles ($ 1,625) but dropped to 15,000 ($ 490) a week ahead of the feared end.


The bunker, located 65 meters (210 feet) below ground, was designed to withstand a nuclear attack. Now home to a small museum, it has an independent electricity supply, water and food — but no more room, because the museum has already sold out all 1,000 tickets.


BRITAIN


Hundreds of people have converged on Stonehenge for an “End of the World” party that coincides with the Winter Solstice.


Arthur Uther Pendragon, Britain’s best-known druid, said he was anticipating a much larger crowd than usual at Stonehenge this year. But he doesn’t agree that the world is ending, noting that he and fellow druids believe that things happen in cycles.


“We’re looking at it more as a new beginning than an end,” he said. “We’re looking at new hope.”


Meanwhile, end-of-days parties will be held across London on Friday. One event billed as a “last supper club” is offering a three-course meal served inside an “ark.”


SERBIA


Some Serbs are saying to forget that sacred mountain in the French Pyrenees. The place to be Friday is Mount Rtanj, a pyramid-shaped peak in Serbia already drawing cultists.


According to legend, the mountain once swallowed an evil sorcerer who will be released on doomsday in a ball of fire that will hit the mountain top. The inside of the mountain will then open up, becoming a safe place to hide as the sorcerer goes on to destroy the rest of the world. In the meantime, some old coal mine shafts have been opened up as safe rooms.


On Friday a New Age group called “The Spirit of Rtanj” was holding a conference there. Participants, however, said they expect not the end of time but the start of a new time cycle. Locals turned out to sell brandy and herbs.


“There will be no tragedy, no doomsday,” said resident Dalibor Jovic. “It was supposed to happen at 12:12 and I think that time has passed. So, we can now go on with our lives and be happy to be alive.”


TURKEY


A small Turkish village known for its wines, Sirince, has also been touted as the only place after Bugarach that would escape the world’s end. But on Friday journalists and security officials outnumbered cultists. This outcome disappointed local business people who had prepared a range of doomsday products to sell, including a specially labeled Doomsday wine and Turkish delight candy whose “best before” date was Dec. 21, 2012. One restaurant prepared a special “last meal” menu that included a “heaven kebab” and “forbidden fruit dessert.”


ITALY


Another spot said to be spared: Cisternino, a beautiful small town in southern Italy in an area of trulli, traditional dry stone huts with conical roofs. The notion that Cisternino could be a safe haven at world’s end derives from an Indian guru, Babaji, who said “Cisternino will become an island” at world’s end. His followers built a community in Cisternino centered on an ashram built in 1979. Hotel bookings are up this weekend.


Mayor Donato Baccaro told the AP that the beauty of the place has inspired many foreigners to live there. “This confirms that this place has a special energy,” he said.


CHINA


A fringe Christian group has been spreading rumors about the world’s impending end, prompting Chinese authorities to detain more than 500 people this week and seize leaflets, video discs, books and other material.


Those detained are reported to be members of the group Almighty God, also called Eastern Lightning, which preaches that Jesus has reappeared as a woman in central China. Authorities in the province of Qinghai say they are waging a “severe crackdown” on the group, accusing it of attacking the Communist Party and the government.


U.S.


Dozens of Michigan schools canceled classes for thousands of students to cool off rumored threats of violence and problems related to doomsday. The fears were exacerbated by the recent shooting at a Connecticut elementary school, which “changed all of us,” the school system in Genesee County said. “Canceling school is the right thing to do.”


___


Associated Press writers Florent Bajrami in Bugarach, France; Mansur Mirovalev in Moscow; Peppino Ciraci in Cisternino, Italy; Suzan Fraser in Ankara, Turkey; Paisley Dodds in London; and Dejan Mladenovic in Mount Rtanj, Serbia, contributed to this report.


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Fiscal cliff deal would pale against expectations


WASHINGTON (AP) — Whether negotiated in a rush before the new year or left for early January, the fiscal deal President Barack Obama and Congress cobble together will be far smaller than what they initially envisioned as an alternative to purposefully distasteful tax increases and spending cuts.


Instead, their compromise, if they do indeed cut a deal, will put off some big decisions about tax and entitlement changes and leave other deadlines in place that will likely lead to similar moments of brinkmanship, some in just a matter of weeks.


Republican and Democratic negotiators in the Senate were hoping for an accord as early as Sunday on what threshold to set for increased tax rates, whether to keep current inheritance tax rates and exemptions and how to pay for jobless benefits and avoid cuts in Medicare payments to doctors.


An agreement would halt automatic across-the-board tax increases for virtually every American and perhaps temporarily put off some steep spending cuts in defense and domestic programs.


Gone, however, is the talk of a grand bargain that would tackle broad spending and revenue demands and set the nation on a course to lower deficits. Obama and Republican House Speaker John Boehner were once a couple hundred billion dollars apart from a deal that would have reduced the deficit by more than $2 trillion over 10 years.


The trimmed ambitions of today are a far cry from the upbeat bipartisan rhetoric of just six weeks ago, when the leadership of Congress went to the White House to set the stage for negotiations to come.


"I outlined a framework that deals with reforming our tax code and reforming our spending," Boehner said as the leaders gathered on the White House driveway on Nov. 16.


"We understand that it has to be about cuts, it has to be about revenue, it has to be about growth, it has to be about the future," House Democratic leader Nancy Pelosi said at the time. "I feel confident that a solution may be in sight."


And Senate Majority Leader Harry Reid, D-Nev., offered a bold prediction: "There is no more let's do it some other time. We are going to do it now."


That big talk is gone for now.


Senate negotiators were haggling over what threshold of income to set as the demarcation between current tax rates and higher tax rates. They were negotiating over estate limits and tax levels, how to extend unemployment benefits, how to prevent cuts in Medicare payments to doctors and how to keep a minimum income tax payment designed for the rich from hitting about 28 million middle class taxpayers.


But the deal was not meant to settle other outstanding issues, including more than $1 trillion in cuts over 10 years, divided equally between the Pentagon and other government spending. The deal also would not address an extension of the nation's borrowing limit, which the government is on track to reach any day but which the Treasury can put off through accounting measures for about two months.


That means Obama and the Congress are already on a new collision path.


Republicans say they intend to use the debt ceiling as leverage to extract more spending cuts from the president. Obama has been adamant that unlike 2011, when the country came close to defaulting on its debts, he will not yield to those Republican demands.


As the day ended Saturday, there were few signs of success on a scaled-back deal, but no one was declaring a stalemate either.


Lawmakers have until the new Congress convenes to pass any compromise, and even the calendar mattered. Democrats said they had been told House Republicans might reject a deal until after Jan. 1, to avoid a vote to raise taxes before they had technically gone up, and then vote to cut taxes after they had risen.


Republicans said they were willing to bow to Obama's call for higher taxes on the wealthy as part of an agreement to prevent them from rising on those less well-off.


Democrats said Obama was sticking to his campaign call for tax increases above $250,000 in annual income, even though in recent negotiations he said he could accept $400,000. There was no evidence of agreement even at the higher level.


Obama, who once proposed nearly $1.6 trillion in tax revenue over 10 years, would get about half of that if he succeeded in getting a $250,000 threshold over 10 years. At a $400,000 level, the revenue figure drops to about $600 billion over a decade.


Republicans want to leave the estate tax at 35 percent after exempting the first $5 million in estate value. Officials said the White House wants a 45 percent tax after a $3.5 million exemption. Without any action by Congress, it would climb to a 55 percent tax after a $1 million exemption on Jan. 1. Obama's proposal would generate more than $100 billion in additional revenue over 10 years.


Democrats stressed their unwillingness to make concessions on both income taxes and the estate tax, and hoped Republicans would choose which mattered more to them.


___


Associated Press writer David Espo contributed to this article.


___


Follow Jim Kuhnhenn on Twitter: http://twitter.com/jkuhnhenn


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C. African Republic neighbors to send help






BANGUI, Central African Republic (AP) — Central African Republic’s neighbors agreed on Friday to dispatch a contingent of soldiers to intervene in the troubled country, where a coalition of rebel groups is seeking to overthrow the president of nearly a decade.


Representatives from the 10-nation Economic Community of Central African States meeting in Gabon, though, did not specify how many troops they could contribute nor did they outline how quickly the military assistance would arrive.






President Francois Bozize had pleaded for international help Thursday as fears grew that the rebels would attack the capital of 600,000 next. Former colonial power France already has said that its forces in the country are there to protect French interests and not Bozize’s government.


“We are now thinking about the arrangements to make so that this mission can be deployed as quickly as possible, said Gabon’s Foreign Affairs Minister Emmanuel Issoze-Ngondet.


The announcement came as military officials in Central African Republic reported renewed fighting in the third largest city of Bambari, which fell under rebel control five days ago.


The military said it had taken country of the town, located about 385 kilometers (240 miles) from the capital, a claim that could not be immediately corroborated.


The ongoing instability prompted the United States to evacuate about 40 people, including the U.S. ambassador, on an U.S. Air Force plane bound for Kenya, said U.S. officials who insisted on anonymity because they weren’t authorized to discuss the operation.


The United States has special forces troops in the country who are assisting in the hunt for Joseph Kony, the fugitive rebel leader of another rebel group known as the Lord’s Resistance Army. The U.S. special forces remain in the country, the U.S. military’s Africa Command said from its headquarters in Stuttgart, Germany.


The evacuation of the U.S. diplomats came in the wake of criticism of how the U.S. handled diplomatic security before and during the attack on its consulate in Benghazi, Libya, on Sept. 11. The ambassador and three other Americans were killed in that attack.


French diplomats are staying despite a violent demonstration outside its embassy earlier this week. Dozens of protesters, angry about a lack of help against rebel forces, threw rocks at the French Embassy in Bangui and stole a French flag. French Foreign Minister Laurent Fabius spoke via phone with Bozize, asking him to take responsibility for the safety of French nationals and diplomatic missions in Central African Republic.


Bozize on Thursday urgently called on former colonial ruler France and other foreign powers to help his government fend off rebels who are quickly seizing territory and approaching the capital. But French President Francois Hollande said France wants to protect its interests in Central African Republic and not Bozize’s government.


This landlocked nation of some 4.4 million people has suffered decades of army revolts, coups and rebellions since gaining independence in 1960 and remains one of the poorest countries in the world. The current president himself came to power nearly a decade ago in the wake of a rebellion in this resource-rich yet deeply poor country.


Speaking to crowds in Bangui, a city of some 600,000, Bozize pleaded with foreign powers to do what they could. He pointed in particular to France. About 200 French soldiers are already in the country, providing technical support and helping to train the local army, according to the French defense ministry.


“France has the means to stop (the rebels) but unfortunately they have done nothing for us until now,” Bozize said.


Bozize’s government earlier reached out to longtime ally Chad, which pledged to send 2,000 troops to bolster Central African Republic’s own forces.


The rebels behind the most recent instability signed a 2007 peace accord allowing them to join the regular army, but insurgent leaders say the deal wasn’t fully implemented. The rebel forces have seized at least 10 towns across the sparsely populated north of the country, and residents in the capital now fear the insurgents could attack at any time, despite assurances by rebel leaders that they are willing to engage in dialogue instead of attacking Bangui.


The rebels have claimed that their actions are justified in light of the “thirst for justice, for peace, for security and for economic development of the people of Central African Republic.”


Despite Central African Republic’s wealth of gold, diamonds, timber and uranium, the government remains perpetually cash-strapped.


The rebels also are demanding that the government make payments to ex-combatants, suggesting that their motives may also be for personal financial gain.


Paris is encouraging peace talks between the government and the rebels, with the French Foreign Ministry noting in a statement that negotiations are due to “begin shortly in Libreville (Gabon).” But it was not immediately clear if any dates have been set for those talks.


The U.N.’s most powerful body condemned the recent violence and expressed concern about the developments.


“The members of the Security Council reiterate their demand that the armed groups immediately cease hostilities, withdraw from captured cities and cease any further advance towards the city of Bangui,” the statement said.


___


Goma reported from Libreville, Gabon. Associated Press writers Krista Larson in Dakar, Senegal; and Jason Straziuso in Nairobi, Kenya contributed to this report.


Africa News Headlines – Yahoo! News





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