4 reasons the government won't mint a trillion-dollar coin to prevent a debt-ceiling crisis

The bizarre gimmick is being discussed — seriously, by some — as a way for the government to keep paying its bills without a fight over raising the borrowing limit
With an epic fight looming over raising the debt ceiling, Rep. Jerrold Nadler (D-N.Y.) and others are reviving a quirky old idea to keep the government from defaulting on its debt: Mint a trillion-dollar coin (or two), deposit it in the Treasury, and use it to pay the bills without having to push the borrowing limit above the current $16.4 trillion. "I'm being absolutely serious," Nadler told Capital New York's Reid Pilifant. "It sounds silly but it's absolutely legal." Actually, not everyone agrees. Here, four reasons the magic coin solution will never happen:
1. It's pretty much illegal
The idea of "minting a $1 trillion platinum coin is getting some blogospheric love" because, technically, the Treasury Department has the authority to make platinum coins with any value it chooses, says Kevin Drum at Mother Jones. There's one teensy problem: "This is ridiculous." The law permitting Treasury to mint platinum coins was pretty clearly intended to apply to bullion and commemorative platinum coins for collectors. "There is, apparently, a widespread belief that courts will uphold a literal, hypertechnical reading of legislative language regardless of its obvious intent, but I'm quite certain this isn't true."
SEE MORE: After conservative revolt, the House clears fiscal-cliff deal
2. It would make the U.S. a laughingstock
"Obviously, this is a gimmick, and no way for a 21st century superpower to deal with its finances," says Steve Benen at MSNBC. Resorting to a cockamamie scheme such as this would turn us into the butt of jokes told around the world. Of course, the fact that people are managing to talk about trillion-dollar coins with a straight face only shows how much "radicalized congressional Republicans" have already raised questions about our creditworthiness and turned our finances into a punch line by "refusing to allow a debt-ceiling increase to pay for spending" Congress has already approved.
3. It would not solve the real problem
Even if President Obama resorts to such an unorthodox move, says Josh Barro at Bloomberg, it won't fix anything. He should only do it if he also promises to issue bonds as soon as Congress allows it so he can buy back any new currency. Then he should push for "a bill revoking his authority to issue platinum coins — so long as that bill also abolishes the debt ceiling," which is the root of the problem. "The executive branch will give up its unwarranted power to print if the legislative branch will give up its unwarranted restriction on borrowing to cover already appropriated obligations."
SEE MORE: The fiscal cliff deal: A big win for President Obama?
4. A trick like this would make fiscal conservatives madder than ever
"Of course, this is not going to happen. Creating money out of thin air is hardly a solution," says Charles Riley at CNNMoney. "It could lead to even more concerns from those worried about inflation." An even more dangerous consequence would be that the many critics already railing about the Federal Reserve's monetary easing programs would be "apoplectic" if the Treasury Department "trumped" Ben Bernanke and literally minted a trillion bucks to pay the bills.

Read More..

Congress finally passes scaled-back Hurricane Sandy aid bill

John Boehner got a lot of grief from his own party for stalling the legislation
The House on Friday voted, 354-67, to pass legislation that would provide the National Flood Insurance Program with $9.7 billion to pay out flood claims stemming from Hurricane Sandy. The Senate passed the bill hours later, ending, for now at least, a drama that saw House Speaker John Boehner (R-Ohio) publicly put through a wood-chipper by members of his own party for tabling a $60 billion version of the legislation passed by the Senate.
Boehner decision to spike the larger bill came shortly after the House passed the fiscal-cliff deal that raised taxes on the wealthiest Americans — a bitter pill to swallow for many in his caucus. Boehner reportedly concluded that he would have a bloody rebellion on his hands if he followed the tax hike with a bill asking for $60 billion in new spending, particularly since some House GOP members had demanded that the emergency aid be offset with cuts elsewhere in the budget. Boehner and his cohort were consequently lambasted by Republican Gov. Chris Christie of New Jersey, who blamed the hold-up on the "toxic internal politics of the House majority."
And the controversy won't end with this latest bill passage. The House still has to consider an additional $50 billion in requested aid that was included in the original Senate bill. "Today was just a down payment," Christie and New York Governor Andrew Cuomo (D) said in a statement, "and it is now time to go even further and pass the final and more complete, clean disaster aid bill." It remains to be seen whether Boehner can get his unruly caucus to go along. Many House Republicans claim that the aid bill is stuffed with unrelated pork.
The $9.7 billion aid package passed today could also bring a future political fallout. All 67 naysayers were Republicans, the most prominent of whom was Rep. Paul Ryan (Wisc.), widely considered to be a possible contender for the 2016 GOP presidential nomination. "In a time of crisis, we must ensure that every dollar we spend is on those who need it," Ryan said in a statement. "President Obama and Congress owe the people of New York and New Jersey better."

Read More..

The daily gossip: Justin Bieber and Selena Gomez break up again, and more

5 top pieces of celebrity gossip — from George Lucas' upcoming nuptials to Tom Selleck's proposed continuation of the Three Men and a Baby franchise
1. Justin Bieber and Selena Gomez break up again
Congratulations, Beliebers: Justin Bieber is reportedly back on the market, after his seventh or eighth breakup with Selena Gomez over the past two months. (We've officially lost track.) The star-crossed lovers reportedly split again shortly before New Year's Eve, which they had originally planned to spend together in Mexico. "They keep breaking up and getting back together. It's an on-again, off-again relationship," says a source at the New York Daily News, describing at least 70 percent of teenage couples.
2. George Lucas is engaged
All is not tragic in the world of celebrity relationships: The Associated Press reports that a short time ago, George Lucas proposed to longtime girlfriend Mellody Hobson, who agreed to marry Lucas even though he's responsible for both Ewoks and Jar Jar Binks. Star Wars fans can presumably look forward to a re-edited, re-mastered cut of the couple's wedding tape using the latest state-of-the-art technology sometime in 2043.
3. Hulk Hogan refiles lawsuit over sex tape, reminding everyone that he was in a sex tape
If you'd finally managed to forget that a sex tape starring former wrestling superstar Hulk Hogan was leaked in October, Hulk Hogan is here to remind you. After dropping his lawsuit against Gawker, which originally posted a clip from the tape, TMZ reports that Hulkamaniac has refiled the case — perhaps because he couldn't convince them to settle it in the ring.
4. Nicki Minaj is still worried about being cool
You might think that earning a Platinum record and also setting a record for consecutive singles on the Billboard 200 would settle any questions about whether a person is "cool" — but in the case of Nicki Minaj, you'd be wrong. "Sometimes you are afraid of being too famous because it's almost, like, is that even cool?" said Minaj, explaining her reluctant decision to become an American Idol judge, in an interview at The Hollywood Reporter. "I'm still surprised that I decided to do it." Minaj's reported $12 million paycheck may have been a tiny motivating factor.

Read More..

HISTORY MEETS FIREARMS

HISTORY MEETS FIREARMS
Barack Obama's determination to enact a gun control measure in the wake of the Connecticut shootings could transform his place in history.
Success, which is anything but assured, given the lobbies arrayed against him and the many failures of such measures, could upend more than two centuries of American tradition. It also could boost the president into the pantheon of liberal presidents, placing him beside Franklin D. Roosevelt and Lyndon B. Johnson as the principal progressives in modern American history.
This may seem discordant with the prevailing view of Obama as a reluctant warrior, a halting leader, an eager compromiser whose opponents are more vocal and more committed than he or his supporters. And on the surface, Obama's accomplishments may seem to pale next to those of FDR and LBJ, both of whom passed multiple pieces of major legislation and whose programmatic principles fit neatly under the two-word thematic umbrellas of the New Deal and the Great Society.
Obama lacks such an overarching template, and his signature achievements -- overhauls of health care and financial services to accompany a potential victory on gun control -- would be more modest in number than those of Roosevelt (scores of alphabet-soup initiatives in just a hundred days, not to mention the Second New Deal) and Johnson (a war on poverty, housing programs, grand civil rights victories and sprawling educational enterprises).
All that is true. But with a victory on guns Obama would deserve an exalted place not because he could match those who came before him program for program or initiative for initiative but because, unlike them, he would have achieved major liberal goals that had eluded his predecessors for generations.
The first, of course, is a comprehensive overhaul of the health care system, which accounts for about one-seventh of the economy, arguably affecting more Americans more deeply than any measure promoted by any president ever.
This is not liberal propaganda, for if you listen to conservatives you will hear the identical argument made with regret: that Obamacare and Dodd-Frank are massive intrusions of government interference in the economy with little if any precedent. If that argument can be made persuasively by conservatives, and you can hear it almost daily on talk radio, then it can be made by liberals to elevate Obama among progressive presidents.
A victory on gun control would similarly set off an earthquake across the American political landscape.
Curtailing the availability of weapons has been a liberal goal since the assassinations of Martin Luther King Jr. and Robert F. Kennedy in 1968, with a few conservatives, including former White House press secretary James Brady, joining the effort after the 1981 attempt to assassinate Ronald Reagan. What Obama almost certainly will propose will be more far-reaching than any proposal on this subject by any previous president, and if he prevails he will have succeeded where other chief executives with liberal leanings, including Johnson, Jimmy Carter and Bill Clinton, have failed.
Although liberals would be reluctant to agree, a victory on gun control also would be a profound departure in American progressive history.
The story of American liberalism is the accumulation of rights. The nation began with brave Enlightenment-era talk about the rights of man, but that very phrase, part of the vocabulary of the late 18th century and the title of a Thomas Paine manifesto, specifically omitted half the population and, because of the presence of slavery in the new nation (and the decision to count slaves as three-fifths of a person), delegated these vaunted rights to a distinct minority of people who thought they lived in a land consecrated by majority rule.
The glory of American liberalism has been the extension of rights to those who did not own property, to those who were not male, to those who were not white, to those who were not straight.
But a major gun control victory for Obama -- awarded an "F" by the Brady Center to Prevent Gun Violence after signing 2009 legislation permitting people to carry concealed weapons in national parks -- would be the first significant abrogation of American rights in our history.
Prohibition does not count; the 18th amendment did not curtail what had been a constitutionally protected right. Limiting gun rights, as NRA members argue, would do so.
Obama's higher status would reflect his success in redeeming long-sought liberal measures. Though he would have only a few legislative achievements to his credit -- plus nudging same-sex marriage toward the mainstream -- the decades-long resistance to his initiatives would give them special standing.
Most of Roosevelt's accomplishments, which include the Civilian Conservation Corps, the Agricultural Adjustment Act, the Wagner Act, the Works Progress Administration and others, were emergency responses to the Great Depression, not measures longed for by liberals for decades. Obama's health care overhaul is arguably as profound an element of the American social contract as FDR's Social Security Act of 1935 (and LBJ's Medicare legislation of 1965). Roosevelt's legislation creating the National Recovery Administration was struck down by the Supreme Court, while Obama's health care legislation was upheld.
By the same token, many of Johnson's Great Society initiatives grew out a sense that a nation as prosperous as mid-1960s America ought to share its bounty with the aged, hungry, poor and striving. Indeed, aside from civil rights, most of the Great Society projects were quickly conceived, not long-thwarted.
Obama has stirred bitter opposition from conservatives and bitter disappointment from liberals. Though conservatives believe he personifies unbounded liberalism, many of his putative allies believe he hasn't pushed hard or far enough. If a major gun control measure is signed into law, history will argue otherwise.

Read More..

REPUBLICANS' FISCAL RESTRAINT IS MOSTLY IN THEIR HEADS

Thanks to an ultraconservative congressional faction, many Americans now view the Republican Party as extremist, petty and irresponsible. You need look no further than the ridiculous, drawn-out drama over the so-called fiscal cliff to see the GOP's inability to negotiate reality.
But while its brand is badly damaged, the Republican Party has managed to keep alive its mystique as the party of fiscal restraint. Shortly before the election, a Washington Post/ABC News poll showed that, by a margin of 51 percent to 43 percent, Americans believed Mitt Romney would do a better job on the deficit than President Obama. That's in keeping with years' worth of public opinion that gives Republicans credit for fiscal conservatism.
But it's flat-out wrong. That's just a convenient myth that Republicans have sold the taxpayers -- a clever bit of marketing that covers a multitude of sins. There is nothing in the GOP's record over the last two decades showing it to be a party that is sincere about balancing the budget, ferreting out waste or reining in excessive government spending. Indeed, it's a big lie.
Just look back at the presidency of George W. Bush -- eight years of red ink that Republicans would like for you to forget. First, Bush pushed through the tax cuts that ruined the balanced budgets Bill Clinton had enacted. Then, he proceeded to prosecute two wars and enact a huge new entitlement: the Medicare prescription drug plan. In response to concerns about spending from then-Treasury Secretary Paul O'Neill, Dick Cheney reportedly said, "You know, Paul, Reagan proved deficits don't matter."
Here's what Republicans and their base believe in: cutting spending for programs that benefit the poor, the darker-skinned, the sciences. They want to stop the flow of government funds to the arts. They want to fire bureaucrats who prevent businesses from harming their customers with poisons and bad products.
But the GOP doesn't really want to end big government, nor does it really care about balancing the budget. If it did, wouldn't its members be ready to tackle the Pentagon? As we wind down a decade of war, isn't this an excellent time to cut back on hyper-expensive weaponry? Can't we stop feeding the military-industrial complex?
Instead, House Republicans have done everything they can think of to protect current rates of military spending. Mitt Romney, for his part, campaigned on a promise to build more warships. Please remember that the Pentagon accounts for about 30 percent of federal spending.
Then there are those pesky retirement programs -- Social Security and Medicare. House Republicans supported Paul Ryan's plan to change Medicare to a voucher program, but they did so knowing that it would never see the light of day. If they were so proud of it, why didn't Ryan campaign on it when he was Romney's running mate?
Instead, the Romney-Ryan team denounced Obama for making cuts to Medicare. The party that claims the mantle of fiscal responsibility shamelessly pandered to its aging base by blaming Obama for trying to rein in one of the costliest government programs.
Democrats have their own soul-searching ahead on Social Security and Medicare, which cannot be sustained without tax increases, benefit cuts or a combination of the two. (Let me rush to say here that Social Security is a much easier fix. Just hike the payroll tax for people earning more than $114,000 a year.) Medicare costs, especially, are growing at an alarming rate as baby boomers retire.
Still, tea partyers -- the core of support for arch-conservatives in Congress -- aren't keen on cutting Medicare, polls show. Many of them seem to believe that cutting spending means only cutting that which goes to other people, not to them. Indeed, political science research shows a sharp racial edge underlying those sentiments, with racially resentful whites likely to favor cuts to programs, such as Head Start, which they associate with the "undeserving" poor.
After winning the gavel as House speaker again last week, John Boehner said the "American dream is in peril" because of debt and pledged to reduce it. As another budget brawl nears -- a debt-ceiling fight will be upon us in a couple of months -- you'll hear Republicans frequently claim the mantle of fiscal responsibility.
There is no reason to believe them.

Read More..

Official: 28 people killed as farmers attack cattle herders in southeastern Kenya

NAIROBI, Kenya - A police official says 28 people have been killed in clashes between farmers and herders in south-eastern Kenya.
Anthony Kamitu, who is leading police operations to prevent the attacks, said Friday that the Pokomo tribe of farmers raided a village of the Orma herding community, called Kipao, at dawn in the Tana River Delta.
The latest deaths in a tit-for-tat cycle of killings may be related to a redrawing of political boundaries and next year's general elections, according to the U.N.
At least 110 people were killed in clashes between the Pokomo and Orma in September and October.
Animosity between the two communities over land and water resources has existed for decades.

Read More..

Cliff poses tiny dollar gap, wide political ravine

WASHINGTON (AP) — When it comes to resolving their "fiscal cliff" impasse, the dollar gap between President Barack Obama and House Speaker John Boehner is tiny in federal terms. That masks a monumental political ravine the two men must try to bridge, with most of the burden on the now beleaguered Boehner.
Short of support from his own Republican Party, a chagrined speaker abruptly canceled a House vote Thursday night on his so-called Plan B. The measure would have prevented looming tax increases on everyone but people earning over $1 million annually, but was opposed by rank-and-file Republican lawmakers unwilling to vote for any tax increases at all.
Now Boehner, R-Ohio, and Obama seem likely to bargain anew over a broad package of tax increases and spending cuts, with Thursday night's GOP retreat weakening Boehner's leverage. Ticking ever louder is the start of the new year, which by law will usher in hundreds of billions in tax increases and spending cuts — the "fiscal cliff" — unless the two men avert it by crafting a compromise deficit-cutting package that can get through the GOP-run House and Democratic-led Senate.
Despite the impassioned political clash that the "cliff" has prompted, weeks of intermittent bargaining between Obama and Boehner have left them facing relatively miniscule dollar differences by Washington standards.
Obama wants to raise taxes by about $20 billion a year more than Boehner. The two men differ over spending cuts by roughly the same amount.
By almost any measure, $20 billion is real money. Yet compared to the $2.6 trillion the government expects to collect next year and to the $3.6 trillion it plans to spend, $20 billion barely registers — less than 1 percent of what the government already is on track to raise and spend. Relative to the U.S. economy, which should weigh in at well over $15 trillion next year, $20 billion is even smaller.
"The policy implication is very slight," Robert Bixby, executive director of the Concord Coalition, a non-partisan anti-deficit group, said of the $20 billion gaps between Obama and Boehner. "It's not worth the price of not getting a deal. And the impact on the economy is totally insignificant."
On the other hand, economists have warned that the "cliff's" massive tax boosts and budget cuts would heave the economy back into a recession, although likely a brief one.
Though the numbers separating them are small, Obama and Boehner have real policy disputes. Yet their inability to strike a compromise so far underscores that their problem is more than arithmetic: It's largely driven by the difficult politics that Obama and Boehner face in firming up support from their own parties.
Boehner's clout was weakened by the Plan B debacle, and it remains unclear how many GOP votes he could deliver for any compromise he might reach with Obama. Yet while his Plan B would have received virtually no Democratic votes, a bipartisan accord with Obama likely would get significant backing from House Democrats, lightening Boehner's load.
Even before Thursday, the president and the speaker each faced formidable political challenges.
Chastened by Obama's re-election, Boehner has violated a quarter-century of Republican dogma by offering to raise taxes, including boosting income tax rates on earnings exceeding $1 million annually.
Eager for a budget deal that would bolster his legacy and let him address other issues, Obama would cut the growth of Social Security benefits, usually off-limits to Democrats. He also would impose tax increases on a broader swath of people than millionaires — those with incomes over $400,000. That figure is a retreat from what he campaigned on: a $200,000 income ceiling on individuals and $250,000 on couples.
Those concessions mean that both men have angered lawmakers and staunch supporters of their respective parties. Neither wants to risk his political capital by embracing a deal his own party rejects.
"When you walk into a room and represent a group and you have to give ground to get a deal, you have to stay in that room as long as you can and you have to walk out with blood on your brow," said Joseph Minarik, research director for the Committee for Economic Development and a veteran of grueling budget talks as a former Clinton White House and House Democratic aide. "Otherwise, the people outside the room don't believe you've fought hard for them."
In their talks, Obama has proposed raising taxes by $1.2 trillion over the coming decade by boosting the current top 35 percent rate to 39.6 percent for income over $400,000, plus other increases on the highest-earning Americans.
He also says he's offered about $1.2 trillion in spending cuts over 10 years, including slowing the growth of benefits from Social Security and other programs. His proposed spending cuts also include $400 billion in savings from Medicare and Medicaid, the health care programs for the elderly and poor whose defense Democrats consider precious priorities.
Boehner has offered about $1 trillion in tax increases and roughly the same amount in spending savings. An earlier Boehner offer included $600 billion in Medicare and Medicaid savings — well more than Obama — but it's unclear whether the speaker is still seeking that figure.
Because of a dispute over how some savings are classified, Boehner says Obama's offer is really $1.3 trillion in higher taxes and only about $850 billion in spending cuts.
The House speaker says Obama's offer is not balanced because its new taxes and spending cuts are unequal. And he complains it does too little to control fast-growing benefit programs like Medicare, a chief driver of the federal government's mushrooming deficits.
Yet while their offers are relatively close, another obstacle they face is that even slight changes in the numbers could force politically significant policy alterations.
Adding, say, another $100 billion to the tax increase over 10 years could mean that people with incomes well below $1 million a year would get a tax increase, something Boehner wants to limit.
On the other hand, adding $100 billion more in spending cuts could mean a deeper hit than Obama wants to Medicare. The president prefers to limit Medicare cuts to the reimbursements that doctors and other health care providers receive, but ever deeper cuts could mean more doctors would be likely to stop treating Medicare patients — an outcome Democrats don't want.

Read More..

Obama vows to press ahead on fiscal cliff solution

WASHINGTON (AP) — President Barack Obama says he'll press ahead with Congress to prevent across-the-board tax increases set to strike taxpayers Jan. 1 after House GOP leaders unexpectedly put off a vote on legislation calling for higher rates on million-dollar earners was abruptly scrapped Thursday evening.
The measure "did not have sufficient support from our members to pass," House Speaker John Boehner, R-Ohio, conceded in a brief statement.
At the White House, Press Secretary Jay Carney said that Obama's "main priority is to ensure that taxes don't go up on 98 percent of Americans and 97 percent of small businesses," citing statistics associated with Obama's campaign promise to increase top tax rates on household earning more than $250,000 a year.
"The President will work with Congress to get this done and we are hopeful that we will be able to find a bipartisan solution quickly that protects the middle class and our economy," Carney said. Pointedly, the statement didn't say whether Obama would work with Boehner to revive stalled talks with Boehner or turn to the Democratic-controlled Senate to try to salvage the situation.
Boehner's attempt to tactically retreat from a longstanding promise to maintain Bush-era tax rates for all was designed to gain at least some leverage against Obama and Senate Democrats in the fiscal cliff endgame. Thursday's drama was a major personal defeat for the Speaker, who retains the respect and affection of his tea party-infused conference, but sometimes has great difficulty in getting them to follow his leadership.
Boehner's Plan B was crafted to prevent tax increases set to kick in on Jan. 1, 2013, on virtually every taxpayer. But it also would have provision that would have let rates rise for those at the upper income range — a violation of long-standing Republican orthodoxy — triggered the opposition of anti-tax lawmakers inside the party.
The hope was that successful House action on the measure would force Senate Democrats to respond. But Senate Majority Leader Harry Reid, D-Nev., made is clear that Plan B would have been dead on arrival in the Senate.
"Speaker Boehner's plans are non- starters in the Senate," Reid said.
Boehner announced he would move to Plan B after with testing the waters with fellow Republicans regarding a possible pact with Obama on tax increases of $1 trillion — including the breakthrough proposal on higher tax rates — and finding them not very receptive.
Thursday's events leave little time for Obama and bruised lawmakers to prevent across-the-board tax increases and deep spending cuts from taking effect with the new year. Economists say the combination threatened a return to recession for an economy that has been recovering slowly from the last one.
The House will not meet again until after Christmas, if then, and the Senate is expected to meet briefly on Friday, then not reconvene until next Thursday.
In his written statement, Boehner said the House has previously passed legislation to prevent all the tax increases from taking effect, and noted that earlier in the evening it had approved a measure to replace across-the-board spending cuts with "responsible" reductions.
In arguing for legislation with a million-dollar threshold for higher tax rates, Boehner said the president has called for legislation to protect 98 percent of the American people from a tax hike. "Well, today we're going to do better than that," he said of the measure that raises total taxes by slightly more than $300 billion over a decade. "Our bill would protect 99.81 percent of the American people from an increase in taxes."
Democrats said that by keeping tax rates unchanged below $1 million — Obama has offered a compromise $400,000 level — Republicans had turned the bill into a tax break for the wealthy. They also accused Republicans of crafting their measure to impose a tax increase on 11 million middle class families.
"This is a ploy, not a plan," said Rep. Sander Levin, D-Mich. He accused Republicans of being "deeply cynical," saying the legislation would scale back some education and child tax credits.
A companion bill on the evening's House agenda, meant to build GOP support for the tax bill, called for elimination of an estimated $97 billion in cuts to the Pentagon and certain domestic programs over a decade. It cleared the House on a partisan vote of 215-209 and is an updated version of legislation that passed a little more than six months ago.
Those cuts would be replaced with savings totaling $314 billion, achieved through increases in the amount federal employees contribute toward their pensions and through cuts in social programs such as food stamps and the health care law that Obama signed earlier in his term.
Ironically, the votes were set in motion earlier in the week, after Boehner and Obama had significantly narrowed their differences on a compromise to avoid the fiscal cliff.
Republican officials said that members of the GOP leadership had balked at the terms that were emerging. Democrats said Boehner's abrupt decision to shift to his Plan B — legislation drafted unilaterally by Republicans — reflected a calculation that he lacked support from his own rank and file to win the votes needed for the type of agreement he was negotiating with the president.
Asked at a news conference a few hours before the scheduled vote if that were so, Boehner avoided a direct answer. "Listen, the president knows that I've been able to keep my word on every agreement we've ever made," he said.
By any measure, the two bills in the House were far removed from the latest offers that officials said Obama and Boehner had tendered. And the two men don't seem to be that far apart.
Obama is now seeking $1.2 trillion in higher tax revenue, down from the $1.6 trillion he initially sought. He also has softened his demand for higher tax rates on household incomes so they would apply to incomes over $400,000 instead of the $250,000 he cited during his successful campaign for a new term.
He also has offered more than $800 billion in spending cuts over a decade, half of it from Medicare and Medicaid, $200 billion from farm and other benefit programs, $100 billion from defense and $100 billion from a broad swath of government accounts ranging from parks to transportation to education.
In a key concession to Republicans, the president also has agreed to slow the rise in cost-of-living increases in Social Security and other benefit programs, at a savings estimated at about $130 billion over a decade.
By contrast, Boehner's most recent offer allowed for about $940 billion in higher taxes over a decade, with higher rates for annual incomes over $1 million.

Read More..

Oil drops as US 'fiscal cliff' approaches

BANGKOK (AP) -- Oil prices fell below $90 per barrel Friday as doubts intensified that political leaders in Washington would be able to reach a deal on the budget before a costly and potentially detrimental package of tax hikes and spending cuts automatically kicks in at year's end.
Benchmark crude for February delivery fell 94 cents at late afternoon Bangkok time to $89.19 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 15 cents to end at $90.13 per barrel Thursday on the Nymex.
Brent crude, used to price international varieties of oil, dropped 59 cents to $109.61 per barrel in London.
If the Republicans and Democrats don't work out a compromise before the end of the month, the U.S. could go over the "fiscal cliff," a reference to hundreds of billions of dollars in big tax increases and government spending cuts that take effect if a budget deal is not reached. Some economists fear that would push the U.S. back into recession, a prospect that would likely mean less energy demand.
Late Thursday, House Republicans abruptly put off a vote on an alternative plan offered by House Speaker John Boehner that would prevent scheduled increases from taking effect on Jan. 1 on all income under $1 million. Obama is seeking a level of $400,000.
In other energy futures trading on the New York Mercantile Exchange:
— Natural gas fell 2.7 cents to $3.435 per 1,000 cubic feet.
— Heating oil fell 1.7 cents to $3.0321 a gallon.
— Wholesale gasoline fell marginally to $2.7317 a gallon.

Read More..

FBI: 1 of 2 escaped Chicago inmates arrested

CHICAGO (AP) — One of the two bank robbers who made a daring escape from a high-rise federal jail in Chicago was arrested after a dayslong manhunt, the FBI said early Friday.
FBI spokeswoman Joan Hyde said Joseph "Jose" Banks was captured without incident in Chicago. Agents and officers from the Chicago FBI's Violent Crimes Task Force, along with officers from the Chicago Police Department, arrested Banks about 11:30 p.m. Thursday, Hyde told The Associated Press in an email.
The search continued for Kenneth Conley, who fled the jail with Banks early Tuesday.
Banks, 37, and Conley, 38, somehow broke a large hole into the bottom of a 6-inch wide window of the Metropolitan Correctional Center, dropped a makeshift rope made of bed sheets out and climbed down about 20 stories to the ground.
The escape went unnoticed for hours, with surveillance video from a nearby street showing the two hop into a cab shortly before 3 a.m. Tuesday. They had changed out of their orange jail-issued jumpsuits.
When the facility did discover the two men were gone around 7 a.m., what was found revealed a meticulously planned escape, including clothing and sheets shaped to resemble a body under blankets on beds, bars inside a mattress and even fake bars in the cells.
A massive manhunt involving state, federal and local law enforcement agencies was launched, as SWAT teams stormed into the home of a relative of Conley only to learn the two escapees had been there and left. The authorities searched other area homes and businesses — even a strip club where Conley once worked.
Law enforcement officials left a host of questions unanswered, including how the men could collect about 200 feet of bed sheets and what they might have used to break through the wall of the federal facility.
Banks, known as the Second-Hand Bandit because he wore used clothes during his heists, was convicted last week of robbing two banks and attempting to rob two others. Authorities say he stole almost $600,000, and most of that still is missing.
During trial, he had to be restrained because he threatened to walk out of the courtroom. He acted as his own attorney and verbally sparred with the prosecutor, at times arguing that U.S. law didn't apply to him because he was a sovereign citizen of a group that was above state and federal law.
Conley pleaded guilty last October to robbing a Homewood Bank last year of nearly $4,000. Conley, who worked at the time at a suburban strip club, wore a coat and tie when he robbed the bank and had a gun stuffed in his waistband.

Read More..