Obama, Congress Waving Bye-Bye Lower Taxes?

The first family arrived in the president's idyllic home state of Hawaii early today to celebrate the holidays, but President Obama, who along with Michelle will pay tribute Sunday to the late Sen. Daniel Inouye at the National Memorial Cemetery of the Pacific, could be returning home to Washington sooner than he expected.

That's because the President didn't get his Christmas wish: a deal with Congress on the looming fiscal cliff.

Members of Congress streamed out of the Capitol Friday night with no agreement to avert the fiscal cliff -- a massive package of mandatory tax increases and federal spending cuts triggered if no deal is worked out to cut the deficit. Congress is expected to be back in session by Thursday.

It's unclear when President Obama may return from Hawaii. His limited vacation time will not be without updates on continuing talks. Staff members for both sides are expected to exchange emails and phone calls over the next couple of days.

Meanwhile, Speaker of the House John Boehner is home in Ohio. He recorded the weekly GOP address before leaving Washington, stressing the president's role in the failure to reach an agreement on the cliff.

"What the president has offered so far simply won't do anything to solve our spending problem and begin to address our nation's crippling debt," he said in the recorded address, "The House has done its part to avert this entire fiscal cliff. ... The events of the past week make it clearer than ever that these measures reflect the will of the House."

Fiscal Cliff Negotiations Halted for Christmas Watch Video

Cliffhanger: Congress Heads Home after 'Plan B' Vote Pulled from House Floor Watch Video

Fiscal Cliff: Boehner Doesn't Have Votes for Plan B Watch Video

Senate Minority Leader Mitch McConnell echoed the sentiment while lamenting the failure to reach a compromise.

"I'm stuck here in Washington trying to prevent my fellow Kentuckians having to shell out more money to Uncle Sam next year," he said.

McConnell is also traveling to Hawaii to attend the Inouye service Sunday.

If the White House and Congress cannot reach a deficit-cutting budget agreement by year's end, by law the across-the-board tax hikes and spending cuts -- the so called fiscal cliff -- will go into effect. Many economists say that will likely send the economy into a new recession.

Reports today shed light on how negotiations fell apart behind closed doors. The Wall Street Journal, citing unnamed sources, reported that when Boehner expressed his opposition to tax rate increases, the president allegedly responded, "You are asking me to accept Mitt Romney's tax plan. Why would I do that?"

The icy exchange continued when, in reference to Boehner's offer to secure $800 billion in revenue by limiting deductions, the speaker reportedly implored the president, "What do I get?"

The president's alleged response: "You get nothing. I get that for free."

The account is perhaps the most thorough and hostile released about the series of unsuccessful talks Obama and Boehner have had in an effort to reach an agreement about the cliff.

Unable to agree to a "big deal" on taxes and entitlements, the president is now reportedly hoping to reach a "small deal" with Republicans to avoid the fiscal cliff.

Such a deal would extend unemployment benefits and set the tone for a bigger deal with Republicans down the line.

In his own weekly address, Obama called this smaller deal "an achievable goal ... that can get done in 10 days."

But though there is no definitive way to say one way or the other whether it really is an achievable goal, one thing is for certain: Republican leadership does not agree with the president on this question.

Of reaching an agreement on the fiscal cliff by the deadline, Boehner said, "How we get there, God only knows."

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Tax fight sends GOP into chaos

The main thing that has held Republicans together philosophically is the belief in holding down taxes. Not one of them in Congress has voted for a significant increase in more than two decades.

Now that very issue is tearing the GOP apart and making it an all-but-ungovernable majority for Speaker John A. Boehner (R-Ohio) to lead in the House.

Disarray is a word much overused in politics. But it barely begins to describe the current state of chaos and incoherence as Republicans come to terms with electoral defeat and try to regroup against a year-end deadline to avert a fiscal crisis.

The presidential election was fought in large measure over the question of whether some Americans should pay more in taxes. Republicans lost that argument with the voters, who polls show are strongly in favor of raising rates for the wealthy.

But a sizable contingent within the GOP doesn’t see it that way and is unwilling to declare defeat on a tenet that so defines them. Nor are they prepared to settle for getting the best deal they can, as a means of avoiding the tax hikes on virtually everyone else that would take effect if no deal is reached.

When Boehner tried to bend even a little, by proposing to raise rates on income over $1 million, his party humiliated him, forcing him Thursday night to abruptly cancel a vote on his “Plan B.”

“We had a number of our members who just really didn’t want to be perceived as having raised taxes,” Boehner said Friday. “That was the real issue.”

Whether and how the party can resolve the issue has implications going forward. It could determine Boehner’s viability — even his survival— as leader of the only part of the federal government controlled by the Republicans.

It also could set the terms of engagement for the battles that lie ahead, including such contentious ones as immigration and the fiscal 2013 spending bills, which are funded for only half the year and which expire March 31.

As things stand now, some worry that nothing short of a catastrophe could force a resolution.

“We have sunk to the lowest common denominator in order to get a deal — sheer panic,” said Republican strategist Ron Bonjean, a former aide to House and Senate leadership. “The reality of a stock market crash is probably the only way Washington will strike a deal. It is probably the only scenario that could likely force the speaker’s hand and allow for a deal driven by Democratic votes to pass the House.”

Which, of course, is not an ideal way to govern.

“The hard-core anti-tax conservatives in the GOP seem to believe that Barack Obama will be blamed if there is no agreement reached to avoid sequestration and the tax increases that are coming,” said Sheldon D. Pollack, a University of Delaware law and political science professor who has written a history of Republican anti-tax policy. “Calculated gamble? Or are they simply incapable of recognizing that they do not control the White House or the Senate, and hence do not have the ability to control the agenda? Sadly, I think it is the latter.”

Their intransigence alone is unlikely to sell the electorate on the Republican point of view on taxes.

“You have to make an argument. You have to go out there and engage. You can’t just simply assert a position,” said GOP pollster David Winston, who advises the House leadership. “Part of the dynamic for Boehner is that he’s trying to have the debate over economic policies that should have occurred during the election, and he also has to deal with this piece of legislation.”

As long as there has been a Republican Party, there has been at least a faction within it that has taken a hard-line stance on taxes, Pollack said. But it has not always had the upper hand.

Abraham Lincoln, the first Republican president, was also the first to put a national income tax into place, as a temporary means of funding the Civil War. Even then, House Ways and Means Chairman Thaddeus Stevens (now enjoying a return to popular consciousness as Tommy Lee Jones’s character in the movie “Lincoln”) denounced the idea of a graduated rate structure as a “strange way to punish men because they are rich.”

The 16th Amendment, which established the constitutionality of the federal income tax in 1913, was proposed by a Republican, Senate Finance Committee Chairman Nelson W. Aldrich. But it was decried by another one, Sen. Henry Cabot Lodge of Massachusetts, as “confiscation of property under the guise of taxation” and “a pillage of a class.”

The divisions went on until the 1980 election of Ronald Reagan, who ran as an advocate of tax-cutting supply-side economics.

In 1990, Newt Gingrich established himself as the de facto head of his party in the House, when he stood up to a president of his own party and led the opposition to George H.W. Bush’s tax increases.

Gingrich insisted in an interview Friday that the Republicans still have leverage, if they are willing to fight hard enough.

“They need a strategy, not just a way of getting through this week,” he said.

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Banquets "off the menu" for China military

BEIJING: China's high-ranking military officers will no longer be treated to receptions featuring liquor and luxury banquets, state media reported on Saturday, as the country's new leaders stress austerity to fight corruption.

The state-run China Daily newspaper, quoting a dispatch from the official Xinhua news agency, said the Central Military Commission announced the new regulations on Friday.

Similar rules were passed down earlier this month aimed at Communist Party officials, as China's new leadership tries to send a clear signal that it is serious about reigning in corruption.

The report said that "receptions for high-ranking officers will no longer feature liquor or luxury banquets", with "welcome banners, red carpets, floral arrangements, formations of soldiers, performances and souvenirs" also to be abandoned.

The Central Military Commission is chaired by new Communist Party chief Xi Jinping, who took over the party and the commission at a key party meeting last month.

"Commission officials are also required to discipline their spouses, children and subordinates and make sure they do not take bribes," the report said, adding that commission officials were banned from staying in civilian or luxury military hotels while on inspection tours.

Xi, who is slated to become China's president in March, has repeatedly pledged to fight graft amid rising social discontent over government corruption and political scandals that have engulfed the Communist Party.

China's political transition this year was tarnished by the case of disgraced politician Bo Xilai, whose wife was convicted of murdering a British businessman.

Bo is awaiting trial for corruption and abuse of power after allegedly using police in Chongqing city where he ruled to remove political opponents and dissidents, practices that are routine in China.

The scandal unveiled rampant graft and lawlessness at the pinnacle of Chinese political power.

- AFP/al

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Fog blinds UP, disrupts railway traffic

LUCKNOW: More than 84 trains were delayed due to the thick fog that enveloped the Uttar Pradesh capital and most parts of the state early Saturday, officials here said.

A railway spokesperson said the thick fog, which started on Friday and became denser on Saturday, threw the train schedule haywire and more than 84 trains were running late by several hours.

The long-distance trains were most effected due to the thick fog cover in Uttar Pradesh and parts of Bihar, he added.

Major trains running late by five-six hours included Triveni Express, Garib Rath, Purabia Express, Avadh Assam, Ganga Sutlej, Gareeb Nawaz and Shaheed Express.

Chilly weather conditions prevailed in the state with the mercury dipping to about five degrees Celsius in Lucknow, Kanpur and Allahabad on Saturday. The weather office here has forecast sub-zero temperatures in some regions by the year end.

Saturday's minimum temperature in Lucknow was five degrees Celsius, while it was 5.4 and 5.2 degrees Celsius in Allahabad and Kanpur, respectively, a weather official said.

Muzaffarnagar was the coldest in Uttar Pradesh at 2.7 degrees Celsius, followed by Najibabad (3.5 degrees Celsius) and Agra (4.2 degrees Celsius).

The average maximum temperature in the state on Saturday was 17 degrees celsius, which was six notches below the normal for this time of the season.

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Pictures: Fungi Get Into the Holiday Spirit

Photograph courtesy Stephanie Mounaud, J. Craig Venter Institute

Mounaud combined different fungi to create a Santa hat and spell out a holiday message.

Different fungal grow at different rates, so Mounaud's artwork rarely lasts for long. There's only a short window of time when they actually look like what they're suppose to.

"You do have to keep that in perspective when you're making these creations," she said.

For example, the A. flavus fungi that she used to write this message from Santa grows very quickly. "The next day, after looking at this plate, it didn't say 'Ho Ho Ho.' It said 'blah blah blah,'" Mounaud said.

The message also eventually turned green, which was the color she was initially after. "It was a really nice green, which is what I was hoping for. But yellow will do," she said.

The hat was particularly challenging. The fungus used to create it "was troubling because at different temperatures it grows differently. The pigment in this one forms at room temperature but this type of growth needed higher temperatures," Mounaud said.

Not all fungus will grow nicely together. For example, in the hat, "N. fischeri [the brim and ball] did not want to play nice with the P. marneffei [red part of hat] ... so they remained slightly separated."

Published December 21, 2012

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Obama Still an 'Optimist' on Cliff Deal

Mandel Ngan/AFP/Getty Images

WASHINGTON D.C. – Ten days remain before the mandatory spending cuts and tax increases known as the “fiscal cliff” take effect, but President Obama said he is still a “hopeless optimist” that a federal budget deal can be reached before the year-end deadline that economists agree might plunge the country back into recession.

“Even though Democrats and Republicans are arguing about whether those rates should go up for the wealthiest individuals, all of us – every single one of us -agrees that tax rates shouldn’t go up for the other 98 percent of Americans, which includes 97 percent of small businesses,” he said.

He added that there was “no reason” not to move forward on that aspect, and that it was “within our capacity” to resolve.

The question of whether to raise taxes on incomes over $250,000 remains at an impasse, but is only one element of nuanced legislative wrangling that has left the parties at odds.

For ABC News’ breakdown of the rhetoric versus the reality, click here.

At the White House news conference this evening, the president confirmed he had spoken today to Senate Majority Leader Harry Reid, D-Nev., and House Speaker John Boehner, R-Ohio, although no details of the conversations were disclosed.

The talks came the same day Speaker Boehner admitted “God only knows” the solution to the gridlock, and a day after mounting pressure from within his own Republican Party forced him to pull his alternative proposal from a prospective House vote. That proposal, ”Plan B,” called for extending current tax rates for Americans making up to $1 million a year, a far wealthier threshold than Democrats have advocated.

Boehner acknowledged that even the conservative-leaning “Plan B” did not have the support necessary to pass in the Republican-dominated House, leaving a resolution to the fiscal cliff in doubt.

“In the next few days, I’ve asked leaders of Congress to work towards a package that prevents a tax hike on middle-class Americans, protects unemployment insurance for 2 million Americans, and lays the groundwork for further work on both growth and deficit reduction,” Obama said. ”That’s an achievable goal.  That can get done in 10 days.”

Complicating matters: The halls of Congress are silent tonight. The House of Representatives began its holiday recess Thursday and Senate followed this evening.

Meanwhile, the president has his own vacation to contend with. Tonight, he was embarking for Hawaii and what is typically several weeks of Christmas vacation.

However, during the press conference the president said he would see his congressional colleagues “next week” to continue negotiations, leaving uncertain how long Obama plans to remain in the Aloha State.

The president said he hoped the time off would give leaders “some perspective.”

“Everybody can cool off; everybody can drink some eggnog, have some Christmas cookies, sing some Christmas carols, enjoy the company of loved ones,” he said. “And then I’d ask every member of Congress, while they’re back home, to think about that.  Think about the obligations we have to the people who sent us here.

“This is not simply a contest between parties in terms of who looks good and who doesn’t,” he added later. “There are real-world consequences to what we do here.”

Obama concluded by reiterating that neither side could walk away with “100 percent” of its demands, and that it negotiations couldn’t remain “a contest between parties in terms of who looks good and who doesn’t.”

Boehner’s office reacted quickly to the remarks, continuing recent Republican statements that presidential leadership was at fault for the ongoing gridlock.

“Though the president has failed to offer any solution that passes the test of balance, we remain hopeful he is finally ready to get serious about averting the fiscal cliff,” Boehner said. “The House has already acted to stop all of the looming tax hikes and replace the automatic defense cuts. It is time for the Democratic-run Senate to act, and that is what the speaker told the president tonight.”

The speaker’s office said Boehner “will return to Washington following the holiday, ready to find a solution that can pass both houses of Congress.”

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How Boehner’s Plan B for the ‘fiscal cliff’ began and fell apart

John A. Boehner’s week on the brink ended in a painfully familiar place.

It began last week when President Obama delivered a stern message to the House speaker: If there was going to be a deal to tame the nation’s debt, it had to happen now. If they went over the “fiscal cliff,” it would only become harder to reach a deal, Obama said.

The next day, Friday, Boehner (R-Ohio) phoned Obama offering what seemed like a major breakthrough: Republicans would agree to raise tax rates for the first time in decades if the president gave a key concession on entitlement reform.

That offer set in motion seven days of dealmaking, posturing and cajoling by Boehner and other House leaders, first on a grand deal with the White House and then on a Plan B with their own House caucus. By Thursday night, both deals had fallen apart, and Boehner was near tears in announcing the failure to his colleagues, Republicans said.

The failure of a grand bargain was the latest oh-so-close moment for Obama and Boehner, who have been dancing around a deal to cut the deficit for the better part of the past two years. And the collapse of Plan B set a new low in Boehner’s sometimes rocky relationship with a House Republican caucus that has long been uneasy about the speaker’s dealmaking with Obama.

Following the latest breakdown in negotiations, Democrats said Boehner should return to the bargaining table with Obama — or just let House Democrats and 25 or so Republicans vote for a Senate-approved plan to extend tax cuts for the middle class. But Republicans said the well has been so poisoned that restarting bipartisan talks would be more difficult than ever.

In a statement late Thursday, Boehner said it was now up to Senate Majority Leader Harry M. Reid (D-Nev.) and Obama to come up with an agreement — without explaining what role he would play. The speaker ignored reporters’ questions and, at 8:04 p.m., he walked out of the Capitol.

A week earlier, the possibility of a deal seemed as promising as it ever had.

As he was heading home to Ohio for the weekend, Boehner called Obama with an offer to allow tax rates for incomes above $1 million to rise from 35 percent to 39.6 percent. In exchange, Boehner demanded a key change to entitlement spending that would lead to reduced benefits.

With a potential $1 trillion in spending cuts, Boehner also suggested that the debt ceiling could be lifted a similar amount and give the Treasury another year of borrowing authority.

The next 72 hours would prove critical. Having offered so much, Boehner hoped he could keep the details quiet long enough for him to get Obama to agree to enough spending cuts to satisfy his caucus — and so that his leadership team could make the case for compromise in person.

But the details did not stay secret for long. Reports leaked out Saturday evening that Boehner had agreed to raise taxes on millionaires. That was followed by a more alarming leak Sunday evening that Boehner was also willing to grant Obama another increase in the federal debt limit. Home in their districts, unsuspecting rank-and-file Republicans were stunned.

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Madoff's brother sentenced to 10 years for fraud

NEW YORK: Peter Madoff, brother of shamed US financier Bernard Madoff, was sentenced on Thursday to 10 years in prison for cooking the books at the family investment firm.

Peter Madoff, 67, pleaded guilty to conspiracy to commit securities fraud during his role as book keeper for Bernard Madoff's once widely heralded but in fact fraudulent Wall Street firm.

The brother has also been slapped with stringent penalties that strip him of virtually everything he owns. Bernard Madoff is serving a 150-year sentence after pleading guilty to the multi-billion-dollar pyramid scheme.

"Peter Madoff was a gatekeeper, who was supposed to guard against fraud, but instead enabled it, facilitating his brother Bernie's breath-taking scheme by falsifying compliance records and lying to both regulators and clients," US Attorney Preet Bharara said in a statement.

"The decade he will spend in prison and the disgorgement of his assets are a just result."

Prosecutors say Peter Madoff did incredibly well through his brother's scheme, in which investors' capital was robbed to pay fake dividends, giving the appearance of an unusually successful Wall Street investment advisory firm.

Peter Madoff insists he had no idea that the whole firm was a fiction. However, he clearly did little to question where the money was coming from -- including his.

The judge ordered Madoff to pay back $143 billion, which represents everything he and his family own, and an enormous, symbolic additional amount.

This includes assets belonging to his wife Marion and daughter Shana. The surrendered items include several homes and a Ferrari sports car.

Bernard Madoff was the toast of Wall Street for years and remained advisor to a multitude of stars and well-connected members of the American-Jewish community, right up until his arrest in December 2008 and the collapse of his scheme.

Two years after that arrest, on December 11, 2010, Bernard Madoff's eldest son Mark was found hanged in his Manhattan apartment.

- AFP/al

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Digvijaya Singh gets bail in defamation case filed by Nitin Gadkari

NEW DELHI: Senior Congress leader Digvijaya Singh was today granted bail by a Delhi court in connection with a criminal defamation case filed against him by BJP president Nitin Gadkari.

Singh appeared before metropolitan magistrate Sudesh Kumar in pursuance to the summons issued against him by the court on November 17 and the judge granted bail to him on a personal bond of Rs 50,000 and a surety of the like amount.

Outside the court, Singh told reporters that he will now prove all his charges against Gadkari.

"Now I can say everything in front of the court the way Gadkari has worked as a businessman and how he has links with various other businessmen, which all companies of his were fake and how he earned profits," he said.

The court after finding "prima facie" evidence against Singh had directed him to appear before it to face trial for the offence punishable under section 499 (defamation) and 500 (punishment for defamation) of the IPC.

The defamation case was filed by Gadkari against the Congress general secretary who had allegedly accused him of having business links with his party MP Ajay Sancheti.

It was also alleged in the complaint that Singh accused Gadkari of pocketing huge sum to the tune of Rs 490 crore in the coal block allocation to Sancheti.

Gadkari, in his statement recorded in the court, had denied having any business ties with Sancheti and had said Singh levelled "totally false and defamatory" allegations against him to "give the impression that I have been responsible for allocation of the coal mines" to Sancheti.

The BJP leader, in his petition filed through advocate Ajay Digpaul, had sought Singh's prosecution under sections 499 and 500 of the IPC.

The court had also said Singh will have the opportunity to put his defence during the trial.

In his petition, Gadkari had alleged that Singh had levelled defamatory allegations against him to lower his dignity in the public at large and it was made with wrongful intent to malign and tarnish his image.

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Hollies Get Prickly for a Reason

With shiny evergreen leaves and bright red berries, holly trees are a naturally festive decoration seen throughout the Christmas season.

They're famously sharp. But not all holly leaves are prickly, even on the same tree. And scientists now think they know how the plants are able to make sharper leaves, seemingly at will. (Watch a video about how Christmas trees are made.)

A new study published in the Botanical Journal of the Linnean Society suggests leaf variations on a single tree are the combined result of animals browsing on them and the trees' swift molecular response to that sort of environmental pressure.

Carlos Herrera of the National Research Council of Spain led the study in southeastern Spain. He and his team investigated the European holly tree, Ilex aquifolium. Hollies, like other plants, can make different types of leaves at the same time. This is called heterophylly. Out of the 40 holly trees they studied, 39 trees displayed different kinds of leaves, both prickly and smooth.

Five holly leaves from the same tree.

Photographs by Emmanuel Lattes, Alamy

Some trees looked like they had been browsed upon by wild goats and deer. On those trees, the lower 8 feet (2.5 meters) had more prickly leaves, while higher up the leaves tended to be smooth. Scientists wanted to figure out how the holly trees could make the change in leaf shape so quickly.

All of the leaves on a tree are genetic twins and share exactly the same DNA sequence. By looking in the DNA for traces of a chemical process called methylation, which modifies DNA but doesn't alter the organism's genetic sequence, the team could determine whether leaf variation was a response to environmental or genetic changes. They found a relationship between recent browsing by animals, the growth of prickly leaves, and methylation.

"In holly, what we found is that the DNA of prickly leaves was significantly less methylated than prickless leaves, and from this we inferred that methylation changes are ultimately responsible for leaf shape changes," Herrera said. "The novelty of our study is that we show that these well-known changes in leaf type are associated with differences in DNA methylation patterns, that is, epigenetic changes that do not depend on variation in the sequence of DNA."

"Heterophylly is an obvious feature of a well-known species, and this has been ascribed to browsing. However, until now, no one has been able to come up with a mechanism for how this occurs," said Mike Fay, chief editor of the Botanical Journal of the Linnean Society and head of genetics at the Kew Royal Botanic Gardens. "With this new study, we are now one major step forward towards understanding how."

Epigenetic changes take place independently of variation in the genetic DNA sequence. (Read more about epigenetics in National Geographic magazine's "A Thing or Two About Twins.")

"This has clear and important implications for plant conservation," Herrera said. In natural populations that have their genetic variation depleted by habitat loss, the ability to respond quickly, without waiting for slower DNA changes, could help organisms survive accelerated environmental change. The plants' adaptability, he says, is an "optimistic note" amidst so many conservation concerns. (Related: "Wild Holly, Mistletoe, Spread With Warmer Winters.")

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