Republicans push own "fiscal cliff" plan; talks frozen

WASHINGTON (Reuters) - Republicans in the Congress pushed ahead on Thursday with a "fiscal cliff" plan that stands no chance of becoming law as time runs short to reach a deal with President Barack Obama to avert a Washington-induced economic recession.
House of Representatives Speaker John Boehner's "Plan B" to limit income-tax increases to the wealthiest sliver of the population appeared likely to pass the House on Thursday evening after it narrowly cleared a procedural hurdle in the afternoon.
However, Obama has vowed to veto the plan, and Senate Majority Leader Harry Reid said he will not bring it up for a vote in the Democratic-controlled chamber. White House spokesman Jay Carney called it a "multi-day exercise in futility."
Still, passage of Plan B could give Boehner the political cover he needs to strike a deal that would break with decades of Republican anti-tax orthodoxy.
"Time's running short. I'm going to do everything I can to protect as many Americans from an increase in taxes as I can," Boehner told a news conference.
Though it does not raise taxes on as many affluent Americans as Obama wants, the bill would put Republicans on record as supporting a tax increase on those who earn more than $1 million per year - a position the party opposed only weeks ago.
That could make it easier eventually to split the difference with Obama, who wants to lower the threshold to households that earn more than $400,000 annually. Obama also faces resistance on his left flank from liberals who oppose cuts to popular benefit programs, which Republicans say must be part of any deal.
Obama and Boehner will need to engage in more political theater to get lawmakers in both parties to sign on to the painful concessions that will have to be part of any deal to avert the cliff and rein in the national debt, analysts say.
"They are now in the mode where they have to demonstrate how hard they're trying to get everything they can," said Joe Minarik, a former Democratic budget official now with the Committee For Economic Development, a centrist think tank.
Even as he pressured Obama and the Democratic Senate to approve his plan, Boehner indicated that he was not willing to walk away from the bargaining table.
"The country faces challenges, and the president and I, in our respective roles, have a responsibility to work together to get them a result," Boehner said.
TIME RUNNING OUT
Obama and Boehner aim to reach a deal before the end of the year, when taxes will automatically rise for nearly all Americans and the government will have to scale back spending on domestic and military programs. The $600 billion hit to the economy could push the U.S. economy into recession, economists say.
Investors so far have assumed the two sides will reach a deal, but concerns over the fiscal cliff have weighed on markets in recent weeks. The S&P 500 index of U.S. stocks was up 0.4 percent in Thursday trading, despite a round of strong data on economic growth and housing.
"The closer we get to the end of the year without a deal, the more optimism is going to evaporate," said Todd Schoenberger, managing partner at LandColt Capital in New York.
Shares crept up after Boehner said he was prepared to work with Obama to prevent the fiscal cliff from kicking in.
Lawmakers are eager to wrap up their work and return home for the Christmas holiday, but congressional leaders kept the door open for last-minute action.
The Senate was expected to leave town on Thursday or Friday, but Reid said it could return next week to vote on any deal.
Boehner indicated the House would stay in session after Thursday's vote, scheduled for 7:45 p.m. EST (0045 GMT on Friday).
Several influential conservative groups have condemned Plan B, and some Republicans are expected to vote against it. But passage appeared likely after the House narrowly voted by 219 to 197 to bring the bill to the floor for debate.
The U.S. Chamber of Commerce, an influential business group that has often tangled with the Obama administration, offered grudging support.
"We are not comfortable allowing tax increases on anyone in this environment. However, we understand that, at times, politics requires compromise," the Chamber's top lobbyist, Bruce Josten, wrote in a letter to lawmakers.
To placate conservatives, Boehner also scheduled a vote on legislation that would shift $55 billion in scheduled defense cuts to cuts in food and health benefits for the poor and other domestic programs.
That measure also would roll back some of the Dodd-Frank financial regulation reforms of 2010. It is not expected to become law.

Read More..

Canada's seven-month budget gap narrows to C$10.6 billion

OTTAWA (Reuters) - Canada's federal budget deficit narrowed in the first seven months of the fiscal year to C$10.57 billion ($10.68 billion) from C$13.90 billion in the same period last year as personal and corporate income tax revenues rose and debt charges were lower.
The monthly shortfall in October was C$1.68 billion, compared with a gap of C$2.13 billion a year earlier, the Department of Finance said in a report on Friday.
The Conservative government in October pushed back by one year, to 2016-17, the date it expects to eliminate the deficit. Most economists believe that if the economy continues to grow, the books could be balanced sooner.
Ottawa has estimated a 2012-13 deficit of C$26 billion, including a C$1 billion cushion for risk.
In the April-October period, revenues increased by 3.6 percent, or C$4.9 billion, from the same period in 2011, pushed up by personal income tax and corporate income tax. Program expenses rose by 2 percent, or C$2.7 billion, on increases in elderly benefits and direct program expenses.
Public debt charges decreased 6.1 percent, or C$1.1 billion, on a lower effective interest rate.

Read More..

Paul keeps Clippers on top in Los Angeles battle

LOS ANGELES (Reuters) - Chris Paul and the Clippers maintained a grip on top billing in Los Angeles with a tense 107-102 victory over the Lakers on Friday to cement their status as the city's best team.
Paul withstood a fierce challenge from Kobe Bryant, recording 30 points and 13 assists to Bryant's 38 points, and the Clippers moved further ahead in both the standings and the crosstown rivalry.
"It's a big win because it's a division game," Paul told reporters, after he carried the scoring load in the absence of injured reserve Jamal Crawford (sore foot).
"That was ugly down the stretch and it was all my fault. We had some terrible possessions (late) and made it interesting for the fans."
The Lakers did their best to tear up the script late on by climbing out of a 19-point deficit in the fourth quarter and closing to 99-97 with two minutes remaining.
However, Paul shut the door on the Lakers, scoring the final eight points for his team, including a tough step-back jumper over the outstretched Bryant in the waning moments.
Blake Griffin added 24 points in the winning effort while Dwight Howard put up 21 points and 15 rebounds for the Lakers (15-17), who have lost three of their last four.
FAST BREAK
Despite sharing the Staples Center, the teams have had little else in common this season as the Clippers (26-8) have raced toward the top of the West while the Lakers are struggling to find an identity under new coach Mike D'Antoni.
The team is just 10-12 since D'Antoni took over.
"It's going to take time and we don't have a lot of it," said Lakers point guard Steve Nash, who finished with 12 points and 10 assists. "You just stick with it."
The Clippers ran off a franchise-record 17 straight wins before losing their previous two games but they quickly regained their form and grabbed a 10-point halftime lead on the Lakers.
The athletic Clippers used their defense to ignite their fast break and push the game's energy with crowd-pleasing dunks.
After their lead swelled to 19 early in the fourth, the Lakers chipped away behind Bryant, who delivered 16 points in the final quarter, to raise the stakes in his duel with Paul.
The two All Stars traded shots all night, with Bryant throwing down a ferocious dunk over Paul in the first quarter, but the Clippers point guard got the final say with a critical jumper and six free throws over the last minute.
"Chris made some amazing shots. It was a great matchup of two of the best in the game," D'Antoni said. "We had a shot at the end and we just didn't do it."

Read More..

NBA: Timberwolves top scorer Love has broken hand

(Reuters) - Minnesota Timberwolves leading scorer Kevin Love has refractured his right hand, the National Basketball Association (NBA) team said on Saturday.
The injury to Love, who missed the first three weeks of the 2012-13 season with a broken right hand, is a severe blow to the Timberwolves (15-14), who are battling to stay in playoff contention in the NBA's Western Conference.
Love, 24, suffered the latest injury in the third quarter of Thursday's game at Denver. An update to Love's status will be provided after he is examined by a hand specialist later this week, the team said in a statement.
The two-time All-Star forward, who was on the gold-medal winning U.S. team at last summer's London Olympics, leads the Timberwolves with an average of 18.3 points and 14 rebounds per game.

Read More..

NBA-D'Antoni says Lakers need better starts, tighter defense

Jan 5 (Reuters) - Faster starts and a much improved defense are sorely needed by the Los Angeles Lakers if the 16-time NBA champions are to resurrect a bitterly disappointing campaign, according to their head coach Mike D'Antoni.
Lakers fans had lofty expectations for 2012-13 after Kobe Bryant and Pau Gasol were joined by fellow All-Stars Dwight Howard and Steve Nash during the off-season but the once mighty franchise has failed to gel, slipping to a 15-17 record.
An ageing line-up has not been helped by a spate of injuries and three different head coaches, though the return of veteran point guard Nash from a leg fracture for the last six games certainly gave the team a much needed lift.
"We just have to get better starts," D'Antoni told reporters after Lakers team practice at their El Segundo training facility on Saturday. "Whatever we're doing isn't working right now.
"And defensively, we need to work harder. We lose our energy on defense sometimes because the offense sputters."
The Lakers lost a tense battle with their city rival Clippers 107-102 on Friday after clawing back from a 19-point deficit early in the fourth quarter at the Staples Center.
FALLING SHORT
In their previous game they also fell short, going down 103-99 on their home court against the struggling Philadelphia 76ers on New Year's Day after trailing by 11 points in the first quarter.
"We competed," D'Antoni said of his team's spirited revival against the Clippers when Bryant finished with a game-high 38 points. "We came back and we had a shot at the end to win.
"We're always shooting under pressure, down eight or 10, and the ball has to go in. Then you're down 15 or 17, and it's 'Oh man'. We're struggling with that a little bit.
"So there are spots where we're really good and there are spots where we seem to dissolve a little bit as a team. We have to find guys that can make shots and we have to get back to that."
The Lakers have very little time to get back as they host the Denver Nuggets on Sunday and their three-time defensive player of the year Howard has billed himself a "game-day decision".
Center Howard put up 21 points and 15 rebounds for the Lakers against the Clippers on Friday but hurt his shoulder in a tangle with Caron Butler and woke up on Saturday in some pain.
Howard skipped team practice on Saturday and received treatment from the Lakers' training staff but D'Antoni was not too worried, saying the center's chances of playing on Sunday were "good."
Bench player Jordan Hill, who sprained his right ankle against the Clippers, was listed as "probable" for Sunday's game against the Nuggets.

Read More..

House Republicans say resigned to tax hike in fiscal cliff

WASHINGTON (Reuters) - Republicans in the U.S. House of Representatives are resigned to seeing some sort of income tax increase in legislation to avoid a "fiscal cliff," but such efforts could be doomed in the absence of spending cuts, some Republican lawmakers say.
Congress and President Barack Obama are gearing up for a last-ditch attempt to avoid $600 billion in tax increases and spending cuts that could halt progress in the U.S. economy, which lately has been showing signs of gaining ground.
The White House said Obama will host a meeting on Friday with the four top congressional leaders - Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell, House of Representatives Speaker John Boehner and House Minority Leader Nancy Pelosi. The Republicans have a majority in the House, while Obama's Democrats control the Senate.
House Speaker John Boehner informed his 241 Republican members on Thursday that the House would come back into session late on Sunday in anticipation of possible fiscal-cliff votes.
This Sunday's session "was about the only thing decided" during a half-hour conference call among House Republicans, said Representative Jeff Flake of Arizona, who will leave the House at the year-end to join the Senate.
In an interview shortly after the phone call, Flake said Republicans in the House and Senate were resigned to seeing some sort of increase in top income-tax rates, although he did not specify a dollar threshold.
While he said he did not want to see any income tax rates go up, Flake said: "I've felt we should've moved a week or two ago to accept the top rate going up and tell the president 'congratulations.'"
The bigger problem in avoiding the fiscal cliff, Flake said, would be if Obama demanded cancellation of the $109 billion in automatic spending cuts set to begin on January 2 without alternative spending cuts to replace them.
"There will be resistance from a lot of House conservatives to a deal that does that," Flake said.
Asked if the days leading up to next Monday, December 31 could thus be fruitless, Flake said, "That is what I am afraid of."
A Senate Democratic aide did not discount the possibility of some spending cuts being included in a limited bill to avert the fiscal cliff - even if they fell far short of the $1 trillion or so in cuts over 10 years that at one point was being discussed in talks between Boehner and Obama.
'TIRED OF WAITING'
Representative Tom Cole of Oklahoma, who also participated in Thursday's House Republican conference call, said its overarching theme was that the Senate should take the bill passed by the House earlier this year to extend all expiring income tax rates and amend it in a way senators see fit.
The House could then either accept that measure, or amend it, and bounce it back to the Senate.
"People are tired of waiting on the Senate to do things," Cole said.
Senate Democrats counter that last July they passed a bill extending the Bush-era tax cuts - except on net household income above $250,000 a year.
Nevertheless, the Senate must still couple its tax-cut bill with Obama's request for extending jobless benefits and possibly some other budget or tax measures.
"I assume the House would want to come back on Sunday knowing that we (the Senate) were going to do something on Friday or Saturday," said Senator Roy Blunt of Missouri, a member of the Senate's Republican leadership.
House Republican leaders informed their members that the chamber could stay in session dealing with the fiscal cliff through Wednesday, January 2 - the last day of the current Congress and a day before the new Congress is sworn in.
Cole said Boehner "made very apparent he is not interested in passing a bill that didn't have a majority of Republicans" supporting it.
But Cole said this was "not quite as elusive to achieve" as many people thought. He said Boehner had "over 200 votes" out of 241 Republicans for his failed "Plan B" - a bill extending lower tax rates except for millionaires - which everyone knew would not become law.
Thus, a bill with prospects of being enacted could attract more support, Cole suggested.
If a new bill came to the House floor to raise taxes on upper incomes, Boehner could force passage with a combination of Democratic and Republican votes.
With public opinion polls showing that Republicans would get most of the blame if the country were to go over the fiscal cliff, some House Republicans have become nervous about their political fortunes.
Both Flake and Cole told Reuters that during Thursday's conference call, some Republicans urged Boehner to bring the House back to Washington sooner than Sunday - a request Flake described as being aimed at improving the "optics" of House Republicans being absent from Washington so close to the December 31 deadline.
But Boehner stuck with his promise to give members at least 48 hours notice of a return.
Cole remained upbeat about a positive end to the fiscal-cliff mess that has gripped Washington for two months now.
"I'm a hopeless optimist. I still think there's a chance we'll get things done. All major deals get done at the end," said Cole, who was one of the first House Republicans to say that he could go along with raising some income-tax rates.

Read More..

French government says will propose a rejigged 75 percent tax plan

PARIS (Reuters) - The French government will redraft a proposal for a 75 percent upper income tax band and resubmit it, the prime minister's office said on Saturday, after the Constitutional Council rejected the measure included in the 2013 budget.
"It will be presented as part of the next budget law," Prime Minister Jean-Marc Ayrault's office said in a statement, without giving a time frame. The statement said the Council's rejection of the 75 percent tax would not affect efforts to trim the public deficit.

Read More..

French court rejects 75 percent millionaires' tax

PARIS (Reuters) - France's Constitutional Council on Saturday rejected a 75 percent upper income tax rate to be introduced in 2013 in a setback to Socialist President Francois Hollande's push to make the rich contribute more to cutting the public deficit.
The Council ruled that the planned 75 percent tax on annual income above 1 million euros ($1.32 million) - a flagship measure of Hollande's election campaign - was unfair in the way it would be applied to different households.
Prime Minister Jean-Marc Ayrault said the government would redraft the upper tax rate proposal to answer the Council's concerns and resubmit it in a new budget law, meaning Saturday's decision could only amount to a temporary political blow.
While the tax plan was largely symbolic and would only have affected a few thousand people, it has infuriated high earners in France, prompting some such as actor Gerard Depardieu to flee abroad. The message it sent also shocked entrepreneurs and foreign investors, who accuse Hollande of being anti-business.
Finance Minister Pierre Moscovici said the rejection of the 75 percent tax and other minor measures could cut up to 500 million euros in forecast tax revenues but would not hurt efforts to slash the public deficit to below a European Union ceiling of 3 percent of economic output next year.
"The rejected measures represent 300 to 500 million euros. Our deficit-cutting path will not be affected," Moscovici told BFM television. He too said the government would resubmit a proposal to raise taxes on high incomes in 2013 and 2014.
The Council, made up of nine judges and three former presidents, is concerned the tax would hit a married couple where one partner earned above a million euros but it would not affect a couple where each earned just under a million euros.
UMP member Gilles Carrez, chairman of the National Assembly's finance commission, told BFM television, however, that the Council's so-called wise men also felt the 75 percent tax was excessive and too much based on ideology.
FRANCE UNDER SCRUTINY
Hollande shocked many by announcing his 75 percent tax proposal out of the blue several weeks into a campaign that some felt was flagging. Left-wing voters were cheered by it but business leaders warned that talent would flee the country.
Set to be a temporary measure until France is out of economic crisis, the few hundred million euros a year the tax was set to raise is a not insignificant sum as the government strives to boost public finances in the face of stalled growth.
Hollande's 2013 budget calls for the biggest belt-tightening effort France has seen in decades and is based on a growth target of 0.8 percent, a level analysts view as over-optimistic.
Fitch Ratings this month affirmed its triple-A rating on France but said there was no room for slippage. Standard & Poor's and Moody's have both stripped Europe's No. 2 economy of its AAA badge due to concern over strained public finances and stalled growth.
The International Monetary Fund recently forecast that France will miss its 3 percent deficit target next year and signs are growing that Paris could negotiate some leeway on the timing of that goal with its EU partners.
The INSEE national statistics institute this week scaled back its reading of a return to growth in the third quarter to 0.1 percent from 0.2 percent, and the government said it could review its 2013 outlook in the next few months.
Saturday's decision was in response to a motion by the opposition conservative UMP party, whose weight in fighting Hollande's policies has been reduced by a leadership crisis that has split it in two seven months after it lost power.
The Constitutional Council is a politically independent body that rules on whether laws, elections and referenda are constitutional.

Read More..

TEST:Pakistan: US drones kill 13, including commander

PESHAWAR, Pakistan (AP) — A pair of U.S. drone strikes in northwest Pakistan near the Afghan border killed 13 people Thursday, including a senior militant commander who had a truce with the Pakistani military, intelligence officials and residents said.
Five Pakistani security officials said the commander, Maulvi Nazir, was reportedly among nine people killed in a missile strike on a house in the village of Angoor Adda in the South Waziristan tribal region early Thursday. The officials spoke on condition of anonymity because they were not authorized to brief the media.
Nazir's killing could prove to be a contentious issue between Washington and Islamabad, which is believed to have struck a nonaggression pact with Nazir ahead of the Pakistani military's 2009 operation against militants in South Waziristan.
Militants under Nazir's command focused their attacks on American forces in neighboring Afghanistan, earning the militant leader the enmity of the U.S. But Pakistan's military viewed Nazir and militant chiefs like him as key to keeping the peace internally because they do not attack Pakistani targets.
Residents in both Angoor Adda and Wana, the biggest town in South Waziristan, said they heard announcements on mosque loudspeakers announcing Nazir's death. One resident, Ajaz Khan, told The Associated Press by telephone that 5,000 to 10,000 people attended the funeral of Nazir and six other people in held in Angoor Adda.
Reports of individual deaths are difficult to independently verify. It is difficult for Pakistani and foreign journalists to travel to the remote areas where many of these strikes occur, and the U.S. rarely comments on its secretive drone program.
The second drone strike took place near Mir Ali, the main town of the North Waziristan tribal region. One missile hit a vehicle near the town, followed by another missile when people rushed to the vehicle to help people in the car. The officials say four people were killed in the strike, although the identities of the dead were not immediately known.
Nazir was attacked by a suicide bomber in November as he was arriving at an office he used to meet with locals and hear their complaints. Nazir and more than a dozen other people were wounded in the attack, and seven people were killed.
No group claimed responsibility for the attack, but suspicion immediately fell on rival militants who have been jockeying with Nazir for power in South Waziristan.
Nazir outraged many Pakistanis in June when he announced that he would not allow any polio vaccinations in territory under his control until the U.S. stops drone attacks in the region. Pakistan is one of three countries where polio is still endemic. Nine workers helping in anti-polio vaccination campaigns were killed last month by militant gunmen.
The former chief of intelligence in northwest Pakistan, retired brigadier Asad Munir, said Nazir's killing will complicate the fight against militants in the tribal region, and could prompt Nazir's group to carry out retaliatory attacks against the Pakistani army in South Waziristan.
It will also raise questions among military commanders here who would like the U.S. to use its firepower against the Pakistani Taliban, which attacks domestic targets, and not against militants like Nazir who aren't seen as posing as much of a threat to the Pakistani state, Munir said.
He added that the risk now for Pakistan is that the remnants of Nazir's group could join ranks with the Pakistani Taliban in its war with the government and army.
The American drone program is extremely controversial in Pakistan where it is seen as an infringement of the country's sovereignty. And while the U.S. maintains that it targets militants, many Pakistanis complain that innocent civilians have also been killed.
America's use of drones has increased substantially under President Barack Obama. According to the Long War Journal, which tracks drone strikes, there were 35 strikes in Pakistan during 2008, the last year President George W. Bush was in office.
In 2009, that number went up to 53 and then shot up to 117 in 2010, the year with the most drone strikes in Pakistani territory. Last year, the U.S. carried out 46 strikes, and the Thursday strike that killed Nazir was the first of 2013.
The program has killed a number of top militant commanders over the past year, including al-Qaida's then-No. 2, Abu Yahya al-Libi, who died in a drone strike in June on the Pakistani village of Khassu Khel in North Waziristan.
In August, another missile strike in North Waziristan killed Badruddin Haqqani, who has been described as the day-to-day operations commander of the Haqqani network, which has been blamed by the U.S. for carrying out some of the most high-profile attacks against American and NATO troops in Afghanistan.

Read More..

Video fuels rumor NKorean leader's wife gave birth

SEOUL, South Korea (AP) — The seemingly pregnant belly sported by the wife of North Korean leader Kim Jong Un in mid-December appeared to be gone by New Year's Day.
That's sent South Korean media into a frenzy of speculation that there's a new baby in the ruling Kim dynasty.
Video broadcast Dec. 17 showed Ri Sol Ju wearing a billowing black dress that covered what appeared to be a swollen belly.
Rumors swept Seoul and Pyongyang that she was pregnant, although it was difficult to tell for sure from the images. There has been no official word from Pyongyang.
But Ri was shown by state TV at a New Year's concert wearing a tighter dress and looking noticeably slimmer. That's causing more speculation in Seoul that she may have given birth.

Read More..