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.

Read More..

Japan's incoming PM pledges to mend ties with China

TOKYO: Japan's incoming premier on Saturday pledged to seek a thaw in ties with China after a report said he will send a special envoy on a fence-mending mission to Beijing.

Ties between Japan and China have become increasingly strained over a disputed island chain -- the Tokyo-controlled Senkakus, which Beijing calls the Diaoyus -- with neither side willing to budge after months of bitter wrangling.

"I want to make efforts to return to the starting point of developing the mutually beneficial relationship based on common strategic interests," Shinzo Abe told reporters.

"The Japan-China relationship is one of extremely important bilateral ties," he said.

The comments came after the business daily Nikkei reported Abe will send Masahiko Komura, the vice president of his Liberal Democratic Party, to deliver a letter to Chinese authorities next month.

They also came a day after China sent ships into territorial waters around the disputed islands, in the first incursion since Japan elected a new government.

"I will shoulder grave responsibility (for Japan's future)," Abe, who will officially be appointed as prime minister on Wednesday, told supporters in his constituency in western Japan earlier Saturday.

"My mission is to bring a breakthrough in the serious situations we face in economy, diplomacy, and education."

Abe said on Friday he will dispatch former finance minister Fukushiro Nukaga to deliver a letter to South Korea's president-elect Park Geun-Hye, who also triumphed in national elections just days ago.

Tokyo is embroiled in a separate row with Seoul over a different set of islets, with tensions flaring up earlier this year after outgoing South Korean president Lee Myung-Bak paid a sudden visit to the disputed territory.

"Abe intends to improve frayed ties with South Korea and with China by sending special envoys," the Nikkei said, without citing sources.

Abe's sweeping parliamentary victory on Sunday was greeted with caution in Beijing and Seoul, with China saying it was "highly concerned" over Japan's future direction under the new government.

In one of his first broadcast interviews after the parliamentary win, Abe said there was no room for compromise on the sovereignty of the disputed islands, calling them "Japan's inherent territory", and putting the onus for improved relations on Beijing.

Despite warm words about the importance of economic ties with Beijing -- China is Japan's biggest trading partner -- Abe stressed the need to build relations with other countries, such as India and Australia.

Analysts have said at least some of this could be posturing, with some believing Abe's LDP will have easier communication with China due to the contacts it developed during its more than half a century rule before it was ousted in 2009.

Abe said Saturday there was "no change in our plans to study" stationing officials on the disputed islands -- a controversial policy option that would further provoke Beijing.

- AFP/al

Read More..

Newly elected Himachal MLA booked for murder, on the run

SHIMLA: Ahead of the Congress Legislature Party (CLP) meeting on Saturday to elect Himachal Pradesh's next chief minister, one of the party's newly elected legislators has gone underground after being booked in a murder case.

Ram Kumar Chaudhary, a first-time MLA from Doon constituency in Solan district, is one of the four suspects in the murder of a 24-year-old woman in Panchkula in Haryana Nov 22.

"Police raided his (Chaudhary's) house in Sandholi (near Baddi) and other places today (Saturday) but he managed to evade arrest. He and other accused have not been joining investigations for quite some time," superintendent of police S Arul said.

Arul said arrest warrants against all the four accused, booked under Section 302 of the Indian Penal Code, were issued on Friday.

The murdered woman's father Butti Ram had lodged a police complaint alleging Chaudhary was in touch with his daughter.

The Punjab and Haryana high court on Thursday directed Haryana Police to expedite the probe.

Congress leaders said Chaudhary had not contacted any senior party leader and was unlikely to attend the CLP meeting in the evening.

Read More..

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

Read More..

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.”

Read More..

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 — out of a total $2 trillion debt deal — 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.

Read More..

Kingfisher shares rise on new licence application

NEW DELHI: Shares in India's grounded Kingfisher Airlines climbed nearly three per cent on Friday on news that the stricken carrier has applied to renew its operating licence.

The move came days after Kingfisher, whose liquor baron owner Vijay Mallya has been desperately seeking investment from foreign carriers, said it aims to resume operations in a "phased manner".

Kingfisher's shares rose to 15.88 rupees in morning trade after regulatory authorities confirmed it had applied Thursday for the licence renewal.

An official said, however, that the application had not included the revival plan that has been demanded by regulators.

"This application needs to be made as their licence is expiring but there can be no (licence) renewal without a revival plan," the official at the Directorate General of Civil Aviation told AFP, asking not to be named.

Kingfisher, once India's second-largest airline by market share, could not be immediately reached for comment but it said on Monday it has come up with a full recapitalisation plan.

The firm has not flown since its planes were grounded in October by an employees' strike over unpaid wages, leading the regulator to suspend its operating licence until it comes up with a "viable" revival formula.

The airline, whose current licence expires on December 31, said last week it was in talks with investors including Abu Dhabi-based Etihad Airways.

But aviation analysts have expressed doubt whether Etihad would be interested in Bangalore-based Kingfisher given its debt load, which is estimated at $2.5 billion by the consultancy firm Centre for Asia Pacific Aviation.

Kingfisher's shares have climbed from an all-time low of 7.05 rupees in August on investor hopes a stake sale will avert a shutdown but they are still trading at a fraction of their record 2007 peak of 334 rupees.

- AFP/il

Read More..

CWG scam: Delhi court orders framing of charges against Suresh Kalmadi & others

NEW DELHI: A Delhi court today ordered framing of charges against sacked CWG organising committee chairman Suresh Kalmadi and others for offences of forgery, cheating and conspiracy in a games-related graft case.

Special CBI Judge Talwant Singh passed the order on framing of charges against Kalmadi, former OC secretary general Lalit Bhanot and nine others for illegally awarding a contract to Swiss firm, Swiss Timing Omega, causing huge loss to the exchequer.

The court said "prima facie" charges of cheating, forgery, criminal conspiracy and for offences under the provisions of the Prevention of Corruption Act are made out against eight accused persons and three companies.

"Charges under section 120B (criminal conspiracy), 201 (destruction of evidence), 420 (cheating), 467, 468, 471 (relating to forgery), 506 (criminal intimidation) of the IPC and section 13(1)(d) read with section 13(2) (criminal misconduct by public servants) of the PC Act is ordered to be framed against all the accused," the court said.

"Put up for formally framing of charges on January 10 at 10.30am," the judge said.

The accused have been charge sheeted by the CBI for "illegally" awarding a contract to install Timing, Scoring and Results (TSR) system for the 2010 CWG to Swiss Timing at inflated rates causing a loss of over Rs 90 crore to the public exchequer.

Besides Kalmadi and Bhanot, the other accused in the case are OC's director general V K Verma, director general (procurement) Surjit Lal, Joint director general (sports) ASV Prasad and treasurer M Jayachandran. They are no more associated with the sporting body.

Promoters of two construction companies — P D Arya and A K Madan of Faridabad-based Gem International and A K Reddy of Hyderabad-based AKR Constructions are also accused in the case. Swiss Timing Omega is also an accused in the case.

The CBI had alleged that Kalmadi and others had rejected Spanish firm MSL's much lower bid of Rs 62 crore and awarded the contract to Swiss Timing Omega, causing a loss of over Rs 90 crore to the exchequer.

During the arguments on charges, CBI counsel V K Sharma had argued that Kalmadi and others had decided to award the contract for installing the TSR system for the CWG to Swiss Timing even before the firm had bid for it.

Sharma had also said that for TSR installation, two bids had been received - one from Swiss Timing and other from MSL Spain, and the same were opened on November 4, 2009 but Kalmadi and Verma had announced in a meeting on October 12, 2009 itself that the contract would be given to Swiss Timing.

He had also said Kalmadi had made up his mind in advance to award the contract to the Swiss firm.

Kalmadi's counsel, however, had argued that the facts given in the CBI's charge sheet were contrary to the documents which the agency had filed in the court.

Kalmadi had told the court that he was only doing the work assigned to him as the OC chairman and nothing wrong was done by him in the entire process.

The counsel appearing for other accused had also opposed the allegations levelled against them by the CBI.

Read More..

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.")

Read More..

Fiscal Cliff 'Plan B' Is Dead: Now What?

Dec 20, 2012 11:00pm

The defeat of his Plan B — Republicans pulled it when it became clear it would be voted down — is a big defeat for Speaker of the House John Boehner.  It demonstrates definitively that there is no fiscal cliff deal that can pass the House on Republican votes alone.

Boehner could not even muster the votes to pass something that would only allow tax rates on those making more than $1 million to go up.

Boehner’s Plan B ran into opposition from conservative and tea party groups -including Heritage Action, Freedom Works and the Club for Growth – but it became impossible to pass it after Senate Democrats vowed not to take up the bill and the president threatened to veto it.  Conservative Republicans saw no reason to vote for a bill conservative activists opposed – especially if it had no hopes of going anywhere anyway.

Plan B is dead.

Now what?

House Republicans say it is now up to the Senate to act.  Senate Democrats say it is now up to Boehner to reach an agreement with President Obama.

Each side is saying the other must move.

The bottom line:  The only plausible solution is for President Obama and Speaker Boehner to do what they have failed repeatedly to do:  come up with a truly bi-partisan deal.

The prospects look grimmer than ever. It will be interesting to see if the markets react.

SHOWS: This Week

Read More..