Friday, November 30, 2012

Reuters: Politics: High court leaves open if it will take up gay marriage case

Reuters: Politics
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High court leaves open if it will take up gay marriage case
Dec 1st 2012, 00:52

Scott Everhart and Jason Welker hold each other before exchanging wedding vows at a comic book retail shop in Manhattan, New York June 20, 2012. REUTERS/Adrees Latif

Scott Everhart and Jason Welker hold each other before exchanging wedding vows at a comic book retail shop in Manhattan, New York June 20, 2012.

Credit: Reuters/Adrees Latif

By Terry Baynes

Fri Nov 30, 2012 7:21pm EST

(Reuters) - The U.S. Supreme Court's nine justices met in private on Friday to consider whether to enter the legal fray over same-sex marriage but made no announcement about any decision they may have reached.

The high court is considering whether to review five separate challenges to a federal law that prevents married same-sex couples from receiving federal marriage benefits such as Social Security survivor payments and tax exemptions.

It is also considering whether to review California's ban on same-sex marriage, known as Proposition 8, which voters narrowly approved in 2008.

An announcement about whether the court will review the gay marriage cases could come as early as Monday morning.

Thirty-one of the 50 states have passed constitutional amendments banning gay marriage while Washington, D.C., and nine states have legalized it, three of them on Election Day, November 6.

At issue is the 1996 Defense of Marriage Act, or DOMA, which only recognizes marriages between a man and a woman. Gay men and lesbians have challenged a part of the law that prevents them from receiving federal benefits that heterosexual couples receive.

Most courts that have addressed the issue, including federal appeals courts in Boston and New York, have found the law's contested provision violates the equal protection provisions of the U.S. Constitution.

Even in states where same-sex marriage is legal, the couples do not qualify for a host of federal benefits because of DOMA.

If the court takes up the issue and invalidates the law, states could still be free to legalize or deny same-sex marriages on their own terms.

Friday's court conference was one of the Supreme Court's regular weekly sessions at which it considers what new cases to add to the calendar.

The meetings, attended only by the justices, are held in a small conference room adjacent to the chambers of Chief Justice John Roberts.

The justices vote in order of seniority, and while it takes five of the nine for a majority decision in a dispute, it takes only four votes to add a case to the agenda and schedule oral arguments.

If the court does not issue an order on the gay marriage cases on Monday, it could relist the cases for further consideration at its weekly conference next Friday. The justices will sometimes hold particularly complex cases for a future conference if they need more time to figure out what course of action to take.

CALIFORNIA BAN

The court is also considering whether to review a challenge to California's ban on same-sex marriage. The California case, Hollingsworth v. Perry, had sought to establish a constitutional right to marry for gays and lesbians.

The 9th Circuit court in February found the gay marriage ban unconstitutional, but it ruled narrowly in a way that only affected California and not the rest of the country, finding that the state could not take away the right to same-sex marriage after previously allowing it.

No other state that has legalized gay marriage has later banned it.

If the Supreme Court decides to take the case, it could follow the 9th Circuit's decision and also rule narrowly, allowing same-sex marriage only in California but not the rest of the country. Or it could recognize a right to marriage equality.

If the justices decline to take the case, the 9th Circuit's opinion would stand and same-sex marriage would resume in California. That would significantly boost the number of same-sex couples able to marry, given the state's large size.

The Supreme Court on Friday also took no action on an appeal from the state of Arizona which asks the court to revive a state version of DOMA.

The Arizona law, which the 9th Circuit invalidated, eliminated domestic partner healthcare benefits for gay and lesbian state employees. Same-sex couples in Arizona cannot marry under a state constitutional ban passed in 2008.

(Reporting by Terry Baynes in New York; Editing by Howard Goller and Eric Walsh)

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Reuters: Politics: Obama cranks up "fiscal cliff" pressure, Boehner says talks stalemated

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Obama cranks up "fiscal cliff" pressure, Boehner says talks stalemated
Dec 1st 2012, 01:18

U.S. President Barack Obama speaks at the Rodon Group, a manufacturer of toys in Hatfield, Pennsylvania, November 30, 2012. Obama pushed for congress to resolve the issue of U.S. debt and Bush-era tax cuts that are set to expire at the end of the year. REUTERS/Jason Reed

1 of 5. U.S. President Barack Obama speaks at the Rodon Group, a manufacturer of toys in Hatfield, Pennsylvania, November 30, 2012. Obama pushed for congress to resolve the issue of U.S. debt and Bush-era tax cuts that are set to expire at the end of the year.

Credit: Reuters/Jason Reed

By Mark Felsenthal

HATFIELD, Penn. | Fri Nov 30, 2012 8:18pm EST

HATFIELD, Penn. (Reuters) - President Barack Obama turned up the pressure in "fiscal cliff" talks on Friday, hitting the road to drum up support for his drive to raise taxes on the wealthy and warning Americans that Republicans were offering them "a lump of coal" for Christmas.

In a visit to a Pennsylvania toy factory, Obama portrayed congressional Republicans as Scrooges who risked sending the country over the fiscal cliff rather than strike a deal to avert the tax increases and spending cuts that begin in January unless Congress intervenes.

In Washington, House of Representatives Speaker John Boehner declared a stalemate in the talks and said Obama's plan to raise taxes on the rich was the wrong approach.

"There is a stalemate. Let's not kid ourselves," the Ohio Republican said. "Right now we are almost nowhere."

Lawmakers are nervously eyeing the markets as the deadline approaches, with gyrations likely to intensify pressure to bring the drama to a close.

Major stock market indexes fell as Boehner spoke but recovered afterward. It was a repeat of the pattern earlier in the week when the Speaker offered a gloomy assessment.

The latest round of high-stakes gamesmanship focuses on whether to extend the temporary tax cuts that originated under former President George W. Bush beyond their December 31 expiration date for all taxpayers, as Republicans want, or just for those with income under $250,000, as Obama and his fellow Democrats want.

"If Congress does nothing, every family in America will see their taxes automatically go up on January 1," Obama said during his visit to a factory in suburban Philadelphia. "That's sort of like the lump of coal you get for Christmas. That's a Scrooge Christmas."

Obama, who made higher tax rates for the wealthy a centerpiece of his re-election campaign, said Americans should pressure Republicans to quickly agree to extend the middle-class tax cuts that cover 98 percent of the public.

"We already all agree, we say, on making sure middle-class taxes don't go up. So let's get that done. Let's go ahead and take the fear out for the vast majority of American families so they don't have to worry," Obama said at The Rodon Group factory, which makes K'NEX building toy systems as well as Tinkertoys and consumer products.

'VICTORY LAP'

Obama's trip to Pennsylvania was part of a renewed public relations push on the fiscal cliff that the White House hopes will build support for his stance. The effort has infuriated Republicans, with Boehner calling it a "victory lap" on Thursday as he rejected Obama's proposals to avoid the cliff.

"It tells you he's not interested in negotiating. He's more interested in traveling around the country trying to campaign," Representative Jim Gerlach, a Pennsylvania Republican, said on CNBC on Friday.

The effort continues next week, as Treasury Secretary Timothy Geithner, Obama's lead negotiator in the talks, makes the rounds of television talk shows on Sunday. Obama will meet a bipartisan group of governors at the White House on Tuesday, and the president will address the Business Roundtable on Wednesday.

Boehner is scheduled for an appearance on Fox News Sunday.

Obama and Boehner both said they still believe the two sides can work together to find a solution before the end-of-year deadline.

But Boehner has been scrambling to keep his House Republicans in line, with some signaling more flexibility on ways to find a combination of new revenue and spending cuts that could yield an agreement.

Most House Republicans refuse to back higher rates, preferring to raise revenue through tax reform. But some have suggested they would support a deal with higher rates for the rich if it includes significant cuts in the government-sponsored Medicare and Medicaid healthcare entitlement programs.

Senate Republican Leader Mitch McConnell of Kentucky told the Wall Street Journal in an interview that Republicans would agree to more revenue - although not higher tax rates - if Democrats agreed to such changes as raising the eligibility age for Medicare and slowing cost-of-living increases in the Social Security retirement program.

House Democratic Leader Nancy Pelosi of California, who has opposed such changes, brushed off the comments. "Nothing new in that statement from Mitch McConnell," she said.

Moderate Republican Representative Steven LaTourette of Ohio, who is retiring at year's end, said he would back some high-end tax rate increases if the deal reforms Medicare.

He said he would support new limits on high-income earners' Medicare benefits, and raising the eligibility age for entitlement programs.

Obama said he was encouraged by the shifting views of some Republicans, and urged House approval of a bill that has already cleared the Democratic-controlled Senate that would lock in the middle-class tax cuts and raise the rates for the rich.

"If we can get a few House Republicans on board, we can pass the bill ... . I'm ready to sign it," Obama said.

(Additional reporting by Richard Cowan, Thomas Ferraro, Kim Dixon, Edward Krudy; Writing by John Whitesides; Editing by Fred Barbash and Xavier Briand)

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Reuters: Politics: Jeb Bush, with cash and clout, pushes contentious school reforms

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Jeb Bush, with cash and clout, pushes contentious school reforms
Nov 30th 2012, 20:29

Former Florida Governor Jeb Bush addresses the National Association of Latino Elected and Appointed Officials Annual Conference in Lake Buena Vista, Florida, June 21, 2012. REUTERS/David Manning

Former Florida Governor Jeb Bush addresses the National Association of Latino Elected and Appointed Officials Annual Conference in Lake Buena Vista, Florida, June 21, 2012.

Credit: Reuters/David Manning

By Stephanie Simon

Fri Nov 30, 2012 3:29pm EST

(Reuters) - Former Florida Governor Jeb Bush soared to rock star status in the education world on the strength of a chart.

A simple graph, it tracked fourth-grade reading scores. In 1998, when Bush was elected governor, Florida kids scored far below the national average. By the end of his second term, in 2007, they were far ahead, with especially impressive gains for low-income and minority students.

Those results earned Bush bipartisan acclaim. As he convenes a star-studded policy summit this week in Washington, he is widely regarded as one of the most influential education reformers in the U.S. Elements of his agenda have been adopted in 36 states, from Maine to Mississippi, North Carolina to New Mexico.

Many of his admirers cite Bush's success in Florida as reason enough to get behind him.

But a close examination raises questions about the depth and durability of the gains in Florida. After the dramatic jump of the Bush years, Florida test scores edged up in 2009 and then dropped, with low-income students falling further behind. State data shows huge numbers of high school graduates still needing remedial help in math and reading.

And some of the policies Bush now pushes, such as vouchers and mandatory online classes, have no clear links to the test-score bump in Florida. Bush has been particularly vigorous about promoting online education, urging states to adopt policies written with input from companies that stand to profit from expanded cyber-schooling.

Many of those companies also donate to Bush's Foundation for Excellence in Education, which has raised $19 million in recent years to promote his agenda nationwide.

Sherman Dorn, a professor of education at the University of South Florida, says some of Bush's policies as governor, such as an intense focus on teaching reading, made a real difference to Florida students. "It's pretty clear Governor Bush should get credit for giving a damn," he said. But by teaming with for-profit corporations to push cyber-schools, which have produced dismally low test scores in many states, Bush is "throwing away whatever credibility he had coming out of Florida," Dorn said.

Bush's allies disagree. For them, the former governor - widely considered a top contender for the 2016 Republican presidential nomination - is a visionary striving to build on his record of success.

"I've been very impressed with the thoughtfulness of his policies," said Joel Klein, who ran New York City schools for eight years and now heads News Corp's education division, Amplify, which donates to the Bush foundation.

Klein and officials at several other education companies that support Bush's foundation say they do so not for their own financial interest but to promote a broad policy debate.

Any implication "that corporate donors give to us for us to advance their agenda" is simply false, said Patricia Levesque, the foundation's executive director.

THE FLORIDA FORMULA

Bush, who declined to comment for this story, says often that he has one abiding goal: to give all students the chance to reach their "God-given potential."

His "Florida formula" rests on the principles of increasing accountability and expanding parental choice. Among its tenets:

* Grade schools on an A-to-F scale, based mostly on student scores and growth on standardized tests. Give students in poorly ranked schools vouchers to attend private and religious schools.

* Hold back 8-year-olds who can't pass a state reading test rather than promote them to fourth grade.

* Expand access to online classes and charter schools, which are publicly funded but privately managed, sometimes for profit.

In Florida, Bush paired his tough-love measures with generous support. Schools that improved their grade or got an "A" received extra funding. Teachers got bonuses for successes like getting more kids to pass Advanced Placement tests. And students required to repeat third grade got intensive help at free summer reading camps.

States adopting the policies now, in a time of austerity, tend to leave out the costly support systems. That has stirred protests from school superintendents, school board members, teachers unions and parents who see the policies as punitive, humiliating and too narrowly focused on a single test as a measure of success.

Voters have spoken loudly, too. In this month's election, overwhelmingly Republican electorates overturned Bush-style reforms in Idaho and South Dakota and ousted the Indiana state schools chief, who had enacted much of the Florida formula.

In Florida, meanwhile, the durability of the Bush-era gains has come into question.

High school graduation rates rose during Bush's tenure but remain substantially lower than in other large and diverse states, including California, New York and Ohio, according to new federal data. Students' average score on the ACT college entrance exam has not improved and remains well below states such as Missouri and Ohio, where a comparable percentage of students take the test.

Florida's scores on the National Assessment of Educational Progress, widely considered the most reliable metric, dropped on all four key tests last year - fourth- and eighth-grade reading and math. On all four tests, low-income students fell further behind their wealthier peers.

Jaryn Emhof, a spokeswoman for the Bush foundation, said the slipping scores are an indication that "schools were getting complacent" and need to be pushed with higher standards.

Opponents contend Bush's reforms never deserved much credit for the gains in the first place.

Other factors were at play, they argue. Florida voters passed a constitutional amendment to limit class size in 2002, for instance. And Bush's tenure coincided with soaring property tax receipts, thanks to the housing boom, which led to more local funding for schools. Per-pupil spending in Florida jumped 22 percent from 2001 to 2007, after accounting for inflation. It has since fallen sharply.

"There's this single-minded notion that only the programs has supported yield improvements," said Ruth Melton, director of legislative relations for the Florida School Boards Association. "There's more to this than meets the eye."

Some recent research has cast doubt on the long-term effectiveness of the Bush policies.

A Harvard education research group reported this summer that Florida students who were held back in third grade notched a big boost in test scores initially, but the effects faded to insignificance before they entered high school. And annual studies commissioned by the state have found no evidence that low-income students who receive vouchers to attend private schools do any better at reading or math than their peers.

As for Florida's charter schools, a recent report found their students consistently outscore kids in traditional schools on state tests. The charters, however, serve fewer poor and special-needs students and fewer students still learning English.

Meanwhile, researchers have found that other states, such as Massachusetts, have boosted achievement without Florida-style reforms, using more old-fashioned remedies such as increasing spending and imposing rigorous curricular standards.

After an exhaustive study of state-by-state academic gains, the Harvard researchers concluded in a July report that "the connection between reforms and gains ... thus far is only anecdotal, not definitive."

Emhof, the Bush foundation spokeswoman, said that while "there is no silver bullet" to improve schools, the Florida formula "is the path with the most proven results." The state's size and diversity mean "if something works in Florida, it can work anywhere," she said.

MEET AND GREET

Indeed, the Bush foundation touts the Florida test gains as "perhaps the greatest public policy success story of the past decade" and aggressively presses its formula on other states.

Hundreds of emails obtained under a public records request by the nonprofit advocacy group In the Public Interest, which opposes privatization of schools, show the foundation working closely with allies in Maine, New Mexico, Florida and elsewhere to craft public policy.

Foundation employees write legislation and edit proposed bills line by line, then send in experts to testify on their behalf, the emails show.

The Bush foundation also funds trips and events to introduce Bush's donors to policy makers. At last year's national summit in San Francisco, the foundation set aside two hours for several state superintendents of education, dubbed "Chiefs for Change," to meet the foundation's sponsors.

In an email forwarded to Executive Director Levesque, an official from Apple Inc also requested access to the chiefs to tout the company's products.

"This is a great opportunity. ... But there are a dozen other companies that want access," Levesque responded. She couldn't accommodate Apple, she wrote, unless the chiefs first found time to meet with "all the other companies including those actually funding" the Chiefs for Change network.

Apple declined to comment.

Bush foundation donors include family philanthropies, such as those established by Microsoft founder Bill Gates and New York City Mayor Michael Bloomberg. Corporate donors include Connections Education, a division of global publishing giant Pearson; Amplify, the education division of Rupert Murdoch's News Corp; and K12, a publicly traded company that runs online schools.

Many of these donors sit on a Digital Learning Council that helped draft the Bush foundation's policy agenda. Key planks call for states to require online course work in high school and to lift restrictions that hinder cyber-school growth, such as limits on class size.

Studies in several states including Pennsylvania and Colorado have found that online students fare far worse than their peers in reading and math. Bush has said bad programs should be shut down, but he believes online schools have great potential to offer personalized, self-paced education.

"This is not about our commercial success," said Sari Factor, chief executive officer of E2020 Inc, which develops online curricula and recently signed up as a foundation sponsor. "We're focused on what's right for kids."

Still, Factor acknowledged that E2020 has "absolutely" benefited from Bush's advocacy.

In particular, Bush often talks up an Arizona charter school called Carpe Diem, which uses the E2020 online curriculum, employing just four teachers for 225 students because the kids do so much work online. Bush has flown policy makers from across the country to admire the school's innovation and cost cutting. That has brought more clients to E2020, Factor said.

Arizona data shows Carpe Diem test scores have fallen sharply over the past two years, a drop founder Rick Ogston attributes to a new curriculum and the sudden death of the principal.

That has not slowed its momentum; after visiting Carpe Diem on a trip paid for by the Bush foundation, Indiana officials urged Ogston to apply to open a branch there. The head of the state charter school board, Claire Fiddian-Green, says the school's "fairly strong track record" impressed her despite the recent slip in test scores. The new Carpe Diem campus in Indianapolis opened this fall.

Ogston said he and other charter and online school operators count on Bush's foundation to remove obstacles to their growth, such as state laws that require students to put in time in a physical classroom.

"We come to them to say, 'These policies are in the way, and it would be great if you could change them,'" Ogston said. "That's what they do better than anyone."

(Reporting by Stephanie Simon; editing by Lee Aitken, Prudence Crowther and Douglas Royalty)

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Reuters: Politics: House votes to expand visas for high-tech foreign workers

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House votes to expand visas for high-tech foreign workers
Nov 30th 2012, 19:22

WASHINGTON | Fri Nov 30, 2012 1:36pm EST

WASHINGTON (Reuters) - A bill to create a permanent visa program for foreigners with advanced science and technical degrees cleared the House of Representatives on Friday, the latest salvo in the broader fight over U.S. immigration reform.

The Republican-backed measure would reserve 55,000 permanent residence visas for foreign graduates of U.S. universities with master's and doctoral degrees in the "STEM" disciplines of science, technology, engineering and math.

Many Democrats including President Barack Obama oppose the bill because it would eliminate an existing program, often called the green card lottery, which provides visas to people from countries with low rates of immigration to the United States.

The bill passed 245-139 in the Republican-controlled House, largely along party lines. But Democrats control the Senate, and a similar bill there has little chance of passing this year.

Texas Republican Representative Lamar Smith, chairman of the House Judiciary Committee who introduced the "STEM Jobs Act," said the high-tech visa program would help the United States retain U.S.-trained workers to spur innovation and job creation.

"In a global economy, we cannot afford to educate these foreign graduates in the U.S. and then send them back home to work for our competitors," Smith said.

Democrats argued that the bill unfairly pits lower-skilled immigrants against those with more education and qualifications in the battle for visas.

"Talk about picking winners and losers," said Representative Luis Gutierrez, an Illinois Democrat who chairs the Immigration Task Force of the Congressional Hispanic Caucus.

"There was no special line for PhD's and master's degree holders at Ellis Island. There was no asterisk on the Statue of Liberty that said your IQ must be this high to enter."

Democrats, emboldened by strong support from Hispanics and other minorities in the November 6 election, are pushing for comprehensive immigration reform legislation.

(Reporting by Alina Selyukh and Richard Cowan; Editing by Xavier Briand)

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Reuters: Politics: Senator presses Hyundai, Kia on compensation plans

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Senator presses Hyundai, Kia on compensation plans
Nov 30th 2012, 18:04

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The logo of Hyundai Motor is seen on the wheel of a car at a Hyundai dealership in Seoul April 26, 2012. REUTERS/Kim Hong-Ji

1 of 3. The logo of Hyundai Motor is seen on the wheel of a car at a Hyundai dealership in Seoul April 26, 2012.

Credit: Reuters/Kim Hong-Ji

WASHINGTON | Fri Nov 30, 2012 1:04pm EST

WASHINGTON (Reuters) - A senior U.S. senator is pressing Hyundai Motor Co. and its affiliate Kia Motors Corp. on their plans to compensate customers for inflated fuel-efficiency claims the two companies admitted earlier this month.

Hyundai and Kia have agreed in negotiations with the Environmental Protection Agency to reimburse customers for additional fuel costs.

Under the plan, customers who purchased one of 13 Kia or Hyundai models from the 2011 to 2013 model years will receive a debit card to reimburse them for the difference in fuel economy and an extra 15 percent will be added to the account to acknowledged the inconvenience.

"While I believe this is a positive step, I am concerned that many affected customers may not learn about the program or may find it burdensome to participate," Senate Commerce Committee Chairman Jay Rockefeller said in separate letters to the heads of Hyundai and Kia's U.S. divisions on Thursday.

He pressed the executives to explain by December 14 how their companies will "maximize the effectiveness and the accessibility" of the program and their plans to reach customers who might not initially take advantage of it.

(Reporting By Doug Palmer; Editing by Bill Trott)

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Reuters: Politics: Obama takes "fiscal cliff" on the road; Republicans stew

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Obama takes "fiscal cliff" on the road; Republicans stew
Nov 30th 2012, 13:05

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U.S. President Barack Obama delivers remarks at the White House in Washington November 28, 2012. REUTERS/Kevin Lamarque

U.S. President Barack Obama delivers remarks at the White House in Washington November 28, 2012.

Credit: Reuters/Kevin Lamarque

By Fred Barbash

WASHINGTON | Fri Nov 30, 2012 7:37am EST

WASHINGTON (Reuters) - President Barack Obama, reapplying his re-election campaign theme of protecting the middle class, heads to Pennsylvania on Friday suggesting that Republicans could spoil Christmas by driving the country over the "fiscal cliff."

The president's road trip, visiting a factory that makes Tinkertoys, is infuriating Republicans, with House of Representatives Speaker John Boehner calling it a "victory lap" Thursday as he rejected Obama's proposals to avoid the cliff, which is a combination of tax increases and spending cuts set to start taking effect in January.

But Boehner confronts challenges not only from Democrats but increasingly from other Republicans, some of whom have advocated greater flexibility than their leadership on Obama's demand that Congress approve tax increases for the wealthy as well as extend tax cuts for the middle class as part of a deal to avoid the cliff. Most Republicans oppose raising any tax rates.

While Republicans are unhappy with the Obama's opening bid of deficit reduction measures, drawn mostly from previous presidential budget proposals, they are nervously eyeing the markets as well as polls indicating that the public is likely to blame Republicans if there is no deal at year's end to avoid the tax increases and severe spending cuts that economists say could tip the economy into a recession.

What the president is doing, Republican Representative Lee Terry of Nebraska told MSNBC on Thursday, "is setting us up to be the fall people for going over the fiscal cliff. And, frankly, going over the fiscal cliff is a win for the president. So either way, we're going to get it."

Obama will visit a manufacturing facility in Hatfield, Pennsylvania, operated by The Rodon Group, a plastic-injection molding company that supplies, among other things, Tinkertoys and Angry Birds building sets for children.

"As we move into holiday season, Democrats and Republicans should come together to renew middle class tax cuts so families have more certainty at this critical time for our economy," the White House said in announcing Friday's trip.

(Editing by Vicki Allen)

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the gop otions are to compromise with someone they hate or be blamed for not doing so. which option helps 99% of america and which one helps their 1% wealthy supporters? time to show us your true colors.

Nov 30, 2012 7:47am EST  --  Report as abuse

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Thursday, November 29, 2012

Reuters: Politics: Analysis: Democrats' discord undercuts Obama estate tax push

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Analysis: Democrats' discord undercuts Obama estate tax push
Nov 30th 2012, 06:07

President Barack Obama talks about the need for Congress to ensure taxes don't go up for the majority of Americans next year, while in the Eisenhower Executive Office Building on the White House complex in Washington, August 3, 2012. REUTERS/Larry Downing

President Barack Obama talks about the need for Congress to ensure taxes don't go up for the majority of Americans next year, while in the Eisenhower Executive Office Building on the White House complex in Washington, August 3, 2012.

Credit: Reuters/Larry Downing

By Kim Dixon

WASHINGTON | Fri Nov 30, 2012 1:07am EST

WASHINGTON (Reuters) - Divisions among Democrats are undermining President Barack Obama's push to raise the U.S. estate tax on inherited wealth, just weeks before the arrival of the "fiscal cliff" could drive the present estate tax rate even higher than Obama proposes.

Action on the estate tax could be postponed. But in his successful re-election campaign, Obama called for wealthy Americans to pay more in taxes - and it is overwhelmingly the wealthy who pay the estate tax.

The outcome may hinge on whether Obama insists on his estate tax proposal - or something close to it - as forcefully as he has insisted on raising individual income tax rates for high income-earners, or whether he lets the issue be put off.

If a single facet of the complicated partisan stand-off over taxing the wealthy best captures Capitol Hill's fiscal gridlock, it may be the estate tax - a long-standing and volatile issue - that may finally be coming to a head.

"If you look at where the public is on tax issues compared to the last time this was debated - it is night and day," said Frank Clemente, campaign manager for left-leaning Americans for Tax Fairness. "They are deep into this tax fairness position."

The "fiscal cliff" is a collection of federal tax increases and automatic government spending cuts that, if allowed to take effect as scheduled early in 2013, could push the U.S. economy into recession, according to economists' forecasts.

Part of the picture is the estate tax.

Under laws signed a decade ago by former Republican President George W. Bush, the estate tax is applied to inherited assets at 35 percent after a $5 million exemption. That means a deceased person can pass on an inheritance of up to $5 million before any tax applies.

Inherited wealth passed to a spouse or a federally recognized charity is generally not taxed.

Obama wants to raise the rate to 45 percent after a $3.5 million exemption. If the Bush rates are allowed to expire and Congress does nothing, the rate will shoot up next year to the pre-Bush levels of 55 percent after a $1 million exemption.

SCHUMER ON ESTATE TAX

New York Senator Charles Schumer on Thursday said the Democrats' proposal to avert the "fiscal cliff" involves $1 trillion in immediate deficit reduction that includes new revenue from raising the estate tax to the level proposed by Obama.

No less a power broker than Democratic Senate Finance Committee Chairman Max Baucus said this week, however, that he wants to hold the estate tax steady at current rates.

Baucus is up for re-election in 2014 from Montana. He says ranch and farm owners in his state would stand to lose if federal taxes rose on passing property to heirs.

"Rural Montana is much different than urban America," Baucus told Reuters in a brief interview in the U.S. Capitol.

He told a Montana newspaper on Sunday that he would even support scrapping the estate tax altogether, as most Republicans favor. A spokesman for Baucus - the Senate's top tax law writer - said he will seek as much estate tax "relief" as he can get.

At least three other rural-state Democratic senators have proposed extending current estate tax rates: Claire McCaskill of Missouri, Jon Tester of Montana and Mark Pryor of Arkansas.

Spokesmen for Pryor and McCaskill said everything is on the table as Congress struggles to deal with the "fiscal cliff."

But one thing is clear: the voice of farming lobbyists is registering with Democrats on the volatile estate tax issue, although it is only marginally about farms and ranches.

BEYOND FARMS AND RANCHES

The estate tax's impact extends beyond farmers and ranchers. It applies mostly to very wealthy Americans, whose taxes have been specifically targeted for increase by a president whom voters returned to the White House just three weeks ago following a tough campaign in which taxes were a key topic.

Of the 3,600 estates subject to the estate tax this year, only 100 are classified as farming estates, according to the congressional Joint Committee on Taxation.

The wealthiest 10 percent of Americans pay nearly all of the estate tax under current rates, according to the Tax Policy Center, a non-partisan fiscal policy think tank.

The number of estates subject to the tax would double under the plan proposed by Obama. About 300 farming estates would be subject to the tax under Obama's terms, which would raise about $100 billion in new revenue for the government over 10 years.

Republicans have benefited previously from Democratic division over the tax. In July, Senate Democrats shelved a plan to raise the estate tax with a symbolic extension of the Bush tax rates for the middle-class.

A senior Senate Democratic aide said the tax was pulled from the bill because Obama felt strongly about boosting the tax. It is unclear how hard he will fight for his position this time.

BY ANY OTHER NAME

The divide between the political parties over the tax is so wide that they cannot even agree on a name for it. Democrats call it the estate tax, as it is described in law.

Republicans, who generally want to repeal it, have another, more provocative name. They call it the "death tax" and characterize it as a penalty on being wealthy and successful.

First enacted nearly a century ago to combat the rise of dynastic wealth and check income disparity, the estate tax is the most progressive tax there is. That means it hits the wealthy much more than lower income groups.

It was a Republican president, Teddy Roosevelt, that proposed the first permanent inheritance tax, arguing that inheritance of "enormous fortunes" does a society no good.

"No advantage comes either to the country as a whole or to the individuals inheriting the money by permitting the transmission in their entirety of the enormous fortunes which would be affected by such a tax," Roosevelt said.

Another decade passed before it was adopted in 1916, partly to fund World War I. The rate has waxed and waned, hitting a high of 77 percent prior to World War II.

(Editing by Kevin Drawbaugh and Dan Grebler)

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Reuters: Politics: Illinois delays election to fill Jackson's House seat until April

Reuters: Politics
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
Illinois delays election to fill Jackson's House seat until April
Nov 30th 2012, 02:25

By Renita D. Young

CHICAGO | Thu Nov 29, 2012 9:25pm EST

CHICAGO (Reuters) - Illinois decided on Thursday to delay until April 9 an election to fill the U.S. House seat vacated by Democratic Representative Jesse Jackson Jr., who resigned last week amid an ethics investigation and concerns over his health.

Illinois Governor Pat Quinn had said on Monday that the special election would be March 19 after a primary on February 26.

But the state Senate voted on Thursday to delay the vote until April to coincide with local elections and save money for the state, which faces a financial crisis. The state House had approved the change on Wednesday.

The winner of the February Democratic primary will be favored in the general election because Jackson's majority African-American district is solidly Democratic.

A number of Democrats have said they intend to run, including state Senators Donne Trotter and Toi Hutchinson, former U.S. Representative Mel Reynolds and Chicago Alderman Anthony Beale.

Reynolds had held Jackson's seat before resigning in 1995 after being convicted on criminal charges of sexual assault and solicitation of pornography.

Chicago Pastor Corey Brooks also is considering a run, a spokeswoman said.

Media reports said former U.S. Representative Debbie Halvorson, who lost to Jackson this year in the primaries, also plans to run for the seat.

In his two-page resignation letter, Jackson, 47, who has been treated for bipolar disorder and is reportedly under investigation for possible misuse of campaign funds, acknowledged he was the target of a federal probe and in possible plea talks.

"I am aware of the ongoing federal investigation into my activities and I am doing my best to address the situation responsibly, cooperate with the investigators and accept responsibility for my mistakes," Jackson wrote.

Jackson easily won re-election on November 6 despite the ethics questions.

His resignation did not result in any change in the political balance of power in the U.S. House of Representatives, which has a solid Republican majority.

Jackson was treated for at least six weeks this summer at the Mayo Clinic in Rochester, Minnesota, for bipolar disorder, a psychological condition marked by extreme mood swings.

He has also been the subject of a House ethics committee probe over an alleged bribe offered by a Jackson supporter in 2008 to then Illinois Governor Rod Blagojevich.

The bribe was said to be intended to entice Blagojevich to appoint Jackson to the U.S. Senate seat vacated by President Barack Obama. Jackson has admitted to lobbying for the seat, but denied knowing about any money offered to Blagojevich, who has since been convicted on corruption charges and imprisoned.

According to news reports citing unnamed sources, Jackson is also being investigated by the FBI over possible misuse of campaign money. The FBI has not confirmed the reports.

(Reporting by Renita D. Young; Editing by Mary Wisniewski, Stacey Joyce, Greg McCune and Lisa Shumaker)

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Reuters: Politics: Republicans already announcing U.S. Senate campaigns for 2014

Reuters: Politics
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
Republicans already announcing U.S. Senate campaigns for 2014
Nov 30th 2012, 02:07

The U.S. Capitol Dome is seen behind the entrance to the U.S. Senate (R) on Capitol Hill in Washington, November 9, 2012. REUTERS/Larry Downing

The U.S. Capitol Dome is seen behind the entrance to the U.S. Senate (R) on Capitol Hill in Washington, November 9, 2012.

Credit: Reuters/Larry Downing

Thu Nov 29, 2012 9:07pm EST

(Reuters) - Former South Dakota Republican Governor Mike Rounds said on Thursday he will run in 2014 for a U.S. Senate seat now held by a Democrat, the second state where a Republican has jumped into the campaign two years before the election.

The announcement by Rounds came just weeks after President Barack Obama won re-election and Democrats unexpectedly strengthened their U.S. Senate majority. Rounds is running for the seat now held by Democratic Senator Tim Johnson.

Republican U.S. Representative Shelley Moore Capito of West Virginia on Monday said she would run for the U.S. Senate seat of incumbent Democratic Senator Jay Rockefeller, who was first elected to the Senate in 1984.

The early entry of Republicans sparked speculation that they are trying to encourage the veteran Democrats to retire rather than face a long and expensive race for reelection.

Republicans failed to capitalize on several opportunities to gain seats in the Senate this year because of nasty battles between conservatives and more traditional Republicans in primaries, and gaffes by candidates during the campaign.

They lost Senate elections in Indiana and Missouri after conservative candidates made controversial comments about abortion and rape that hurt their support, particularly among women.

Democrats gained two seats in the election and now hold a Senate majority of 53 to 45, plus two independents who caucus with Democrats.

Rounds, 58, was elected governor in 2002 after serving a decade in the South Dakota state Senate and was reelected in 2006. Rounds is chief executive of an independent insurance agency with an office in Pierre, the state capital.

"I am here today to ask the people of South Dakota for their support and to allow me to work for them as their United States Senator in 2014," Rounds said in an appearance in Sioux Falls.

Rounds said there were many problems to solve at the federal level including deficit spending, healthcare reforms and fixing Social Security, and he urged cooperation in solving them.

"We need to become a country of cooperation instead of confrontation," Rounds said, adding that many of the most important decisions would be made in the U.S. Senate.

Johnson said in a statement he would wait until later in 2013 to announce his formal plans, "But I feel great, still have work to do, and I fully intend to put together a winning campaign in the weeks and months ahead."

Johnson was first elected to the U.S. Senate in 1996. He nearly died in December 2006 after suffering from bleeding into his brain, but returned to full Senate work in September 2007.

Johnson, who also served five terms in the U.S. House, said he had an excellent working relationship with Rounds while Rounds was South Dakota's governor.

"I consider Mike a friend, and I welcome him to the race," Johnson said.

(Reporting by David Bailey in Minneapolis; Editing by Greg McCune and Eric Walsh)

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Reuters: Politics: Boehner sees no progress in fiscal cliff talks

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Boehner sees no progress in fiscal cliff talks
Nov 30th 2012, 00:21

U.S. House Speaker John Boehner (R-OH) speaks next to Majority Leader Eric Cantor (R-VA) during a news conference on Capitol Hill in Washington, November 28, 2012. REUTERS/Yuri Gripas

1 of 3. U.S. House Speaker John Boehner (R-OH) speaks next to Majority Leader Eric Cantor (R-VA) during a news conference on Capitol Hill in Washington, November 28, 2012.

Credit: Reuters/Yuri Gripas

By Richard Cowan and David Lawder

WASHINGTON | Thu Nov 29, 2012 7:21pm EST

WASHINGTON (Reuters) - House of Representatives Speaker John Boehner said on Thursday that "fiscal cliff" talks with the White House had made no substantive progress and criticized President Barack Obama and Democrats for failing to get serious about including spending cuts in a final deal.

Boehner said he was "disappointed" after a phone call with Obama on Wednesday night and a meeting with Treasury Secretary Timothy Geithner on Thursday moved the two sides no closer to an agreement to avert the tax hikes and spending cuts that will be triggered at the start of 2013 unless Congress intervenes.

"I'm disappointed in where we are and disappointed in what's happened over the last couple of weeks," Boehner, of Ohio, told reporters after a private session with Geithner at the Capitol.

"No substantive progress has been made in the talks between the White House and the House over the last two weeks," he said. "There's been no serious discussion of spending cuts so far, and unless there is, there's a real danger of going off the fiscal cliff."

Markets dipped briefly into negative territory on Boehner's comments, continuing a pattern of gyration based on the latest utterance or headline about the outlook for an agreement to avert the fiscal cliff.

The tone was in sharp contrast to the one expressed on November 16, the last time Obama met with congressional leaders. Boehner then stood next to Democratic leaders and voiced optimism they could find common ground in fiscal cliff negotiations.

Complicating the debate on Thursday was a renewed fight over raising the U.S. debt ceiling. That explosive issue, which could have been handled separately in the spring, was thrust into the fiscal cliff fray on Thursday in an exchange between Republicans and Democrats.

Boehner said any debt limit increase needed to be matched or exceeded by spending cuts to be proposed by Obama as part of the cliff negotiations.

'DEEPLY IRRESPONSIBLE'

White House spokesman Jay Carney responded by demanding that Congress go ahead and raise the debt ceiling as part of any year-end deal to avoid the cliff. To do otherwise, he said, would be "deeply irresponsible."

The last partisan fight over the nation's borrowing limit in 2011 was settled by a law that led directly to the fiscal cliff and to a downgrade of the government's credit rating.

Geithner, Obama's top negotiator in the talks, met with congressional leaders from both parties at the Capitol as the end-of-year deadline approaches to avoid the onset of $600 billion in tax hikes and spending cuts that analysts warn could push the U.S. economy back into recession.

The immediate issue is whether the tax cuts that originated in the administration of former President George W. Bush should be extended beyond December 31 for all taxpayers including the wealthy, as Republicans want, or just for taxpayers with income under $250,000, as Obama and his fellow Democrats want.

Republicans have said they are willing to consider new ways to raise revenue as long as Democrats and Obama agree to accompany it with significant spending cuts, particularly to entitlement programs like the government-sponsored Medicare and Medicaid healthcare plans.

"Without spending cuts and entitlement reform, it's going to be impossible to address our country's debt crisis. Right now, all eyes are on the White House," Boehner said.

Boehner said Geithner and the administration had not offered any new plans during the meeting to break the impasse, while Senate Democratic leader Harry Reid said Democrats were still waiting for a "reasonable" proposal from Republicans.

Carney said the president had put forward "very specific spending cuts," including some in the entitlement healthcare programs, but had not seen any movement from Republicans.

CRACKS IN REPUBLICAN RANKS

Despite a few cracks in Republican ranks, most notably from Republican Representative Tom Cole of Oklahoma, neither side has budged significantly in recent weeks from its position, leaving the markets and political analysts alike to grasp at wording nuances.

"I think unfortunately it seems pretty clear that the market is trading very much off the reading of the tea leaves on how these fiscal cliff negotiations are going," said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago.

In the absence of progress, or any realistic understanding as to when or if Republicans and Democrats might avert the cliff or come up with some deficit reduction agreement, prodding has started to come on a regular basis from business leaders as well as Federal Reserve officials.

New York Fed President William Dudley and Richard Fisher of the Dallas Fed, highlighted the problems that U.S. lawmakers were causing for both hiring and the economy with each day they fail to strike a deal to avoid a pending fiscal crisis.

Dudley said on Thursday that if it is not addressed, the economic contraction is likely to be larger than normal because interest rates are so low.

The post-election lame-duck session of Congress also has made clear that until the two sides get over the immediate tax issue, they will not be able to move forward on the serious discussions they desire on longer-term deficit reduction and tax reform.

Keeping the nation in suspense down to a white-knuckled deadline has become the rule rather than the exception for Congress in recent years.

Whether the risk has been a government shutdown or, as in the events that led to the fiscal cliff, default for failure to raise the U.S. government's borrowing power, Republicans and Democrats have needed the pressure of time and possible disaster to bring them together.

(Additional reporting by Rachelle Younglai, Thomas Ferarro and Kim Dixon; Writing by John Whitesides and Fred Barbash; Editing by Peter Cooney)

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