Republicans Balk at Obama’s Short-Term Stimulus

WASHINGTON — Republicans and Democrats are struggling to find common ground on a long-term debt deal. But as economic growth has weakened this quarter, they are at odds over what the flagging recovery needs in the immediate future, too.

The Obama administration is arguing that the sluggish economy requires a shot in the arm, and it included tens of billions of dollars of little-noticed stimulus measures in its much-noticed proposal to Congressional leaders last week. But Republicans have countered that the country cannot afford to widen the deficit further, and have balked at including the measures in any eventual deal.

The stimulus measures in the White House’s debt proposal stem from President Obama’s long-since-scuttled American Jobs Act proposal, and include a continuation of emergency support for long-term unemployed workers, an extension of the payroll tax cut, billions in infrastructure investment and a mortgage-refinancing proposal.

“We have a very good plan, a very good mix of tax reforms” and savings, said Timothy F. Geithner, the Treasury secretary, on ABC News last weekend. “We can create some room to invest in things that make America stronger, like rebuilding America’s infrastructure.”

But in his counteroffer, made on Monday, House Speaker John A. Boehner of Ohio did not mention any such measures. Republican aides said that securing stimulus was not the main priority given concerns about the country’s fiscal state, and they appeared to be holding back on supporting any stimulus measures to bolster their bargaining position.

“The president is asking for $1.6 trillion worth of new revenue over 10 years, twice as much as he has been asking for in public,” Mr. Boehner said on “Fox News Sunday.” “He has stimulus spending in here that exceeded the amount of new cuts that he was willing to consider. It was not a serious offer.”

As the debate rages in Washington, data has shown the recovery once again sputtering, with the underlying rate of growth too slow to bring down the unemployment rate by much and some of the economic momentum gained in the fall dissipating in the winter.

The weakness comes from the manufacturing and exports slowdown, disruptions from Hurricane Sandy and sluggish underlying wage and spending growth. The storm hit the economic juggernauts of New Jersey and New York hard, pushing down work and wages. On top of that, consumers and businesses might be holding back out of concern for the tax increases and spending cuts scheduled to take place at the first of the year unless Congress and the administration come to some agreement.

In recent weeks, many forecasters have slashed their estimates of growth in the fourth quarter. Macroeconomic Advisers, for instance, estimates the economy is expanding at only a 0.8 percent annual pace, down from 2.8 percent in the third quarter.

“It’s a pretty dramatic slowdown,” said Joel Prakken, the chairman of Macroeconomic Advisers, the St. Louis-based forecasting firm. “There’s weak demand, which just does not portend well for the coming quarters,” he said.

RBC Capital Markets put the current pace of growth at just a 0.2 percent annual rate. The chance of seeing “a negative sign in front of fourth-quarter gross domestic product is nontrivial, to say the least,” Tom Porcelli, chief United States economist at RBC Capital Markets, wrote in a note to clients last week.

If Congress and the Obama administration are able to agree on a budget deal, economists expect that economic growth will pick up in 2013. Stock markets might cheer, businesses might feel more confident about hiring workers and signing contracts and investors might feel more comfortable investing if Congress struck a deal.

The turnaround in the housing market, rising auto sales and higher consumer confidence all bode well, they note. Refinancing — supported by the Federal Reserve’s effort to buy mortgage-backed securities — would also flush more money into households.

Much of the current slowdown might be a result of temporary factors that might fade away, like fluctuations in how factories stock their inventories or the lingering effects of Hurricane Sandy.

Still, recent economic data has come in surprisingly weak. On Monday, the Institute for Supply Management reported that the manufacturing sector contracted in November, with an index of purchasing activity falling to the lowest level since mid-2009.

The report said manufacturers expressed “concern over how and when the fiscal cliff issue will be resolved” as well as a slowdown in demand.

Over all, unemployment remains high, and wage growth weak. Global growth has gone through a slowdown as well. It all adds up to a United States recovery that might remain vulnerable to shocks — like the Midwestern drought that slashed agricultural production this year, or the Japanese tsunami that depressed exports in 2011, or the long-simmering European debt crisis that has spooked financial markets — for years to come.

Economists remain nervous about the combination of the already weak recovery and the prospect of the tax increases and spending cuts — with billions of dollars of fiscal contraction likely to take place even if the White House and Congress reach a deal.

“We are worried about going too fast, too quick on the cuts side,” said former Senator Pete V. Domenici, Republican of New Mexico, on Monday at a meeting with reporters at the Bipartisan Policy Center. He was presenting a plan for a deficit reduction framework along with Alice M. Rivlin, the budget director under President Bill Clinton.

Ms. Rivlin added, “We don’t need an austerity budget.” Indeed, the two budget experts proposed including a one-year income tax rebate to give the recovery some breathing room.

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In ‘Fiscal Cliff’ Talks, First Step Is the Hardest

WASHINGTON — For all the growing angst over the state of negotiations to head off a fiscal crisis in January, the parties are farthest apart on a relatively small part of the overall deficit reduction program — the down payment.

President Obama and the House speaker, John A. Boehner, are in general agreement on the overarching issue: that the relevant Congressional committees must sit down next year and work out changes to the tax code and entitlement programs to save well more than $1 trillion over the next decade.

But before that work begins, both men want Congress to approve a first installment on deficit reduction that would replace the automatic spending cuts and tax increases that make up the “fiscal cliff,” while signaling Washington’s seriousness about getting its fiscal house in order. That is where the chasm lies in size and scope.

Mr. Obama says the down payment should be large, real and made up almost completely of tax increases on top incomes. He is putting such emphasis on the tax increases partly because he and Congressional leaders last year agreed on some spending cuts over the next decade but have yet to agree on any tax increases.

Republicans have countered by arguing for a smaller down payment that must include immediate savings from Medicare and other entitlements. Republicans, using almost the mirror-image language of Mr. Obama, have said that they do not want to agree to specific tax increases and vague promises of future spending cuts.

“I think there’s a lot of confusion between the initial down payment and the framework. That’s for sure,” said Senator Kent Conrad of North Dakota, chairman of the Senate Budget Committee and part of a bipartisan “Gang of Six” senators who devised the two-stage process.

The two sides are trying to get to a deal that would start with a specific down payment and then fix targets for larger savings in the tax code and entitlement programs. They are expected to spend much of the next year hashing out the specific policy changes needed to hit those targets.

The argument over the size of the down payment is critical. Republicans and Democrats alike worry that canceling roughly $600 billion in deficit-reducing tax increases and spending cuts next year might spook financial markets, which could take the move as proof that the United States’ fiscal problems are politically intractable.

But neither side believes Congress could meaningfully overhaul the main drivers of future deficits — Medicare and Medicaid — in the four weeks that remain before the fiscal deadline.

“Entitlement reform is a big step, and it affects tens of millions of people,” said Senator Richard J. Durbin, Democrat of Illinois and another architect of the two-stage framework. “It’s not just a matter of cutting spending in an appropriation. It’s changing policy. And that’s why I was reluctant to include it in the down-payment conversation. I want this to be a thoughtful effort on both sides that doesn’t jeopardize this program.”

Republican leaders have said that they are willing to raise new revenues in a broad deficit deal, but they want taxes to rise by closing loopholes and curbing tax deductions and credits — a tall order for Congress in a year, let alone a month. They explicitly do not want to allow tax rates to rise on income over $250,000, an issue that is becoming the main stumbling block in the talks.

Mr. Obama is seeking to lock in $1.6 trillion in higher revenue as the bulk of the first stage of deficit reductions before stage two even begins. House Republicans say the down payment should be at least $110 billion, the value of the automatic spending cuts they would cancel next year, and they want those savings to come largely from cuts in Medicare and other benefit programs.

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Nokia Siemens to sell optical networks unit

FRANKFURT (Reuters) – Mobile telecoms equipment joint venture Nokia Siemens Networks, which is focusing on its core business, is to sell its optical fiber unit to Marlin Equity Partners for an undisclosed sum.

Up to 1,900 employees, mainly in Germany and Portugal, will be transferred to the new company, NSN said on Monday.

The company, owned by Nokia and Siemens, has sold a number of product lines since it last year announced plans to divest non-core assets and cut 17,000 jobs, nearly a quarter of its total workforce.

Nordea Markets analyst Sami Sarkamies said he expected more divestments after the optical unit deal. This disposal was a small surprise, he said, because NSN needed some optical technology – where data is transmitted by pulses of light – for its main mobile broadband business.

The move may hint the company is preparing itself for further consolidation in the sector by cutting overlaps with other players, Sarkamies said.

The telecom equipment market is going through rough times with stiff competition. French Alcatel-Lucent is also cutting costs.

($ 1 = 0.7689 euro)

(Reporting by Harro ten Wold; Editing by Greg Mahlich and Dan Lalor)

Tech News Headlines – Yahoo! News

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Palace says Duchess of Cambridge expecting a baby

LONDON (AP) — The most widely anticipated pregnancy since Princess Diana's in 1981 is official: Prince William's wife, Kate, is pregnant.

St. James's Palace announced the pregnancy Monday, saying that the Duchess of Cambridge — formerly known as Kate Middleton — has a severe form of morning sickness and is currently in a London hospital. William is at his wife's side.

News of the pregnancy drew congratulations from across the world, with the hashtag "royalbaby" trending globally on Twitter.

The couple's first child will be third in line to take the throne — leapfrogging the gregarious Prince Harry and possibly setting up the first scenario in which a U.K. female heir could benefit from new gender rules about succession.

The palace would not say how far along the 30-year-old duchess is, only that she has not yet reached the 12-week mark. Palace officials said the duchess was hospitalized with hyperemesis gravidarum, a potentially dangerous type of morning sickness where vomiting is so severe no food or liquid can be kept down. They said she was expected to remain hospitalized for several days and would require a period of rest afterward.

"It's not unusual for pregnant women to get morning sickness, but when it gets to the point where you're dehydrated, losing weight or vomiting so much you begin to build up (toxic) products in your blood, that's a concern," said Dr. Kecia Gaither, director of maternal fetal medicine at Brookdale University and Medical Center in New York.

The condition is thought to affect about one in 50 pregnant women but Gaither said less than one percent of women with the condition need to be hospitalized.

The news came just days after the duchess, on a royal appearance, was playing field hockey with schoolchildren at her former school.

Not only are the attractive young couple popular — with William's easy common touch reminding many of his mother, the late Diana — but their child is expected to play an important role in British national life for decades to come.

William is second in line to the throne after his father, Prince Charles, so the couple's first child would normally become a monarch — eventually.

The confirmation of Kate's pregnancy caps a jam-packed year of highs and lows for the young royals, who were married in a lavish ceremony at Westminster Abbey last year.

They have traveled the world extensively as part of Queen Elizabeth II's Diamond Jubilee celebrations and weathered the embarrassment of a nude photos scandal, after a tabloid published topless images of the duchess.

Joe Little, managing editor of Majesty magazine, said the news bookended a year that saw the royal family riding high in popular esteem after celebrations of Queen Elizabeth II's 60 years on the throne.

"We're riding on a royal high at the moment at the end of the Diamond Jubilee year," he said. "People enjoyed the royal romance last year and now there's this. It's just a good news story amid all the doom and gloom."

Speculation about when the couple would start a family has been rife since their wedding.

William's mother Diana got pregnant just four months after her wedding in 1981. Diana also reportedly suffered from morning sickness for months and complained of constant media attention.

"The whole world is watching my stomach," Diana once said.

She gave birth to William in 1982 after 16 hours of labor. At his birth, William was given a baby tag marked 'Baby Wales' and a 41-gun salute was fired in Hyde Park and the Tower of London.

In September 1983, roughly a year after the birth of William, Buckingham Palace announced that Diana was pregnant for a second time. However, within a week, Diana suffered a miscarriage when on holiday at Balmoral, Scotland.

In 1984, she became pregnant again and gave birth to Harry.

American tabloid speculation of Kate's pregnancy has been rampant for months. One newspaper even cited anonymous sources talking about Kate's hormone levels. Others have focused on the first signs of the royal bump.

The palace said the royal family was "delighted" by the news. British Prime Minister David Cameron admitted he got a heads-up about the pregnancy, saying he found the news "quite difficult" to keep to himself and expressing his confidence the duo will make "absolutely brilliant parents."

The leaders of Britain and the 15 former colonies that have the monarch as their head of state agreed in 2011 to new rules which give females equal status with males in the order of succession.

Although none of the nations had legislated the change as of September, the British Cabinet Office confirmed that this is now the de-facto rule.

Those changes make Kate's pregnancy all the more significant for the royal family, according to Ingrid Seward, editor-in-chief of Majesty magazine.

"This is the first child who will be an heir to the throne whatever sex they are," she said. "It's a new beginning."

Graham Smith of anti-monarchy group Republic called Kate's pregnancy a "private, personal matter" for her and William, saying the flood of media coverage was disproportionate

"We've heard today that our future head of state is on the way. It's a pretty bizarre way of choosing someone for public office," he said.

On the couple's tour of Malaysia, Singapore, the Solomon Islands and Tuvalu in September, William reportedly said he hoped he and Kate would have two children.

___

Associated Press writers Jill Lawless, Paisley Dodds and AP Medical Writer Maria Cheng contributed to this report.

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Pullback in Manufacturing

WASHINGTON — Manufacturing in the United States shrank in November to its weakest level since July 2009, one month after the recession ended, the Institute for Supply Management said Monday.

The institute’s index of manufacturing conditions fell to a reading of 49.5 points last month, down from 51.7 in October.

Readings above 50 signal growth, while readings below indicate contraction. Manufacturing grew in October for only the second time since May. The institute is a trade group of purchasing managers.

A gauge of new orders dropped to its lowest level since August, a sign that production could slow in the coming months. Manufacturers also sharply reduced their stockpiles, indicating companies expected weaker demand.

“Today’s report suggests that the manufacturing sector is likely to remain a weak point in the recovery for a few months yet,” Jeremy Lawson, an economist at BNP Paribas, said in a note to clients.

The weak manufacturing survey overshadowed other positive economic reports. Greater home building in the United States bolstered construction spending in October by the most in five months. Manufacturing activity in China grew in November for the second straight month. And auto sales in the United States rebounded last month after Hurricane Sandy held sales back in October.

The institute said manufacturers are concerned about the sharp tax increases and government spending cuts that will take effect in January if Congress and the Obama administration fail to strike a budget deal before then.

These worries have led many companies to pull back this year on purchases of machinery and equipment, which signal investment plans. The decline could slow economic growth and hold back hiring in the October-December quarter.

A measure of hiring in the institute’s survey fell to 48.4 points, the lowest reading since September 2009.

Companies “are just backing off and not making any moves until things clear up a bit,” Bradley Holcomb, chairman of the Institute for Supply Management’s survey committee, said.

Consumers also appear nervous about higher taxes. Economists cited the prospect of higher tax rates in 2013 as a main reason consumer spending fell in October by the most since May.

When consumers cut back on spending, businesses typically reduce their pace of restocking. Both trends are expected to slow economic growth at the end of the year.

The economy grew from July through September at an annual rate of 2.7 percent, largely because of strong growth in inventories. Most economists predict growth is slowing in the current October-December quarter to a rate below 2 percent.

Hurricane Sandy had little impact on factory activity last month, according to the institute’s survey. The storm hit the East Coast on Oct. 29 and affected businesses in 24 states.

A gauge of production in the survey rose in November for the third straight month. That’s a sign that the hurricane didn’t force many factory shutdowns.

A slowdown in global growth has weighed on American manufacturers. New export orders slipped in November for the second straight month.

Surveys show consumers remain upbeat about the economy, despite the looming taxes and spending cuts. A measure of consumer confidence reached a five-year high in November.

If lawmakers and President Obama can work out a budget deal that averts the tax increases, most economists predict a good year for the economy.

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Taliban Bombers Attack Air Base in Afghanistan

KABUL, Afghanistan — Taliban forces attacked a large coalition airfield in eastern Afghanistan early Sunday, detonating three car bombs near the entrance and engaging in a two-hour gun battle that killed nine insurgents, four Afghan guards and at least four civilians whose vehicle was caught in the cross-fire, Afghan officials and witnesses said.

Noorullah Shirzada/Agence France-Presse — Getty Images

Taliban attackers detonated three car bombs near the entrance of a coalition airbase in eastern Afghanistan on Sunday.

Disguised in coalition military uniforms, the Taliban fighters attempted to enter the airfield, known as Forward Operating Base Fenty, after the initial explosions, which occurred just before 6 a.m., but were repelled by firepower that included helicopter gunships, officials said. Fewer than 10 coalition service members were wounded, according to official reports, though by late Sunday it remained unclear exactly how many had been hurt, and how severely. At least one of the guards killed in the fighting was a member of the Afghan military.

The Taliban quickly claimed responsibility for the operation, saying it had killed “tens” of foreign forces, though the insurgents routinely overstate the deadliness of their attacks.

But the coordinated assault, which left the entry to the base strewn with the remains of the bombers, was a potent reminder of the Taliban’s determination to continue the fight. As the coalition forces wind down the 11-year war, and with Western combat troops already withdrawing, the attacks serve as a reminder that the Taliban are not going anywhere — and that their firepower remains undiminished. How successful the nation’s defenses will be after the 2014 withdrawal of coalition forces is a question on the minds of many Afghans.

Forward Operating Base Fenty is primarily run by American and is one of the larger airfields in eastern Afghanistan. Like other large coalition bases, Fenty has been attacked before, including in February, when a suicide blast killed nine Afghans. The assaults have, in most cases, been repulsed before the insurgents could fight their way inside bases, and coalition casualties have been minimal, as appears to have been the case on Sunday.

But the Afghans who work or live near the base have not been so fortunate. Afghan officials said that two of the civilians killed were doctors, their car riddled by gunfire about 50 yards from the base. The doctors had been on their way to work in Jalalabad, the capital of Nangarhar Province, said Hajji Niamatullah Khan, the district governor of Behsood. In addition, at least three private security guards on duty at the outer perimeter were killed, he said.

Coalition forces had few details about the extent of the damage from the Taliban assault.

Zabiullah Mujahid, a Taliban spokesman, said medical evacuation helicopters could be seen ferrying dead and wounded American soldiers from the scene, “which shows that heavy casualties were inflicted” by the attackers.

He also claimed that a Toyota sport utility vehicle packed with explosives had leveled one of the guard towers. He said that some of the attackers were wearing “foreign” military uniforms, a tactic that the Taliban have employed in previous assaults on coalition bases. An official from the American-led coalition confirmed that at least some of the attackers wore coalition uniforms.

The last major assault against a coalition base was in September, when the Taliban blew up eight Harrier attack jets and killed two Marines at Camp Bastion in Helmand Province. The militants, wearing American Army uniforms, caused more than $200 million in damage in that attack.

Sharifullah Sahak contributed reporting.

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Verizon may soon launch Samsung Galaxy Camera with 4G LTE

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Young down by boardwalk for benefit show

NEW YORK (AP) — Neil Young says he couldn't see performing in the area devastated by Superstorm Sandy without doing something to help people who were affected by it.

Young and his longtime backing band, Crazy Horse, will be in Atlantic City for a benefit concert Thursday. He said he hopes to raise several hundred thousand dollars for the American Red Cross' storm relief effort with the show at the Borgata Hotel Casino & Spa.

Young is on tour in the area, playing Monday in Brooklyn and Tuesday in Bridgeport, Conn.

He said in an interview Sunday that fans in the area had been supporting him for 40 years and he wanted to do what he could to help.

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Auctions Introduce Market Forces to Conservation, but Hunters Cry Foul

Wild Country Outfitters at Deseret CWMU

This year, 3,209 licenses for deer, elk, moose or pronghorn were disbursed by ranchers — about 2 percent of the 142,000 licenses available for all game.

SALT LAKE CITY — Todd Huntington, a dentist from a small town in central Utah, considered himself lucky. After two years of failing to secure a hunting permit in the state’s random drawing, he won a $35 state permit to shoot a male deer.

Once he was out among the fir and aspen forests of the Wasatch plateau this fall, he came upon a buck, aimed a muzzleloader and pulled the trigger. Nothing happened. As the buck fled, Dr. Huntington glared at his gun and wondered when this chance might come again. “When I was a teenager, anybody could buy a tag down to the hardware store and away you went,” he said. “Now you have to have a degree in wildlife-speak to work your way through all the regulations to be able even to apply.”

It especially bothers him — and other hunters — that those with means can buy public licenses through private outlets, paying thousands of dollars to move to the head of the line. More than any state in the West, Utah has expanded hunting opportunities for the well-to-do and has begun to diminish them for those seeking permits directly from the state.

State wildlife managers recognize this, but they say their motives are grounded in animal — if not social — welfare. Utah has embraced an increasingly free-market model as a way to raise more money for conservation.

Here is how it works: the state has enticed ranchers with an allotment of vouchers for lucrative hunting licenses that they can sell for thousands of dollars as part of a private hunt on their land. Many used to complain bitterly to state officials about elk and other game eating forage meant for their cattle.

The vouchers for hunting licenses, handed out for more than 10 years now, give them ample economic incentive to nurture big game on their land and not get frustrated with ranching and sell their land to developers.

Another program, smaller in scope but much more controversial, allows private nonprofit groups to auction off a few hundred licenses to the highest bidder or run their own drawing in exchange for supporting conservation projects. State wildlife managers say that with species like elk, the system is working to produce more game for all.

“We want the most wildlife we can have,” said Greg Sheehan, the director of the State Division of Wildlife Resources. “The question is how we do that.”

This new approach, some say, violates a century-old American ethic, articulated by Theodore Roosevelt, himself an avid hunter, that wildlife belongs to all, and not just to those with land or wealth.

“Money has definitely infiltrated our American hunting system,” said David Allen, the president of the Rocky Mountain Elk Foundation, based in Montana. “Some of it’s totally ethical and legal and aboveboard. But is it all good? Maybe, maybe not.”

However deeply the new system has taken root in Utah, efforts to franchise it around the West have faltered. States like Alaska, Arizona and Idaho have rejected large auctions.

Randy Newberg of Bozeman, Mont., whose cable hunting show “On Your Own Adventures” runs on the Sportsman Channel, disparaged Utah’s approach as unfair. “A person gets to buy their way to the front of the line when you have people who wait 10, even 20 years for a permit and thousands waiting in line,” he said. “It’s turning the corner away from what’s been the most successful wildlife model in the world.”

The Utah group Sportsmen for Wildlife has benefited most from the auction of what are called “conservation permits,” which sell for tens of thousands of dollars. The nonprofit Mule Deer Foundation works with this group in running the annual drawing of “convention permits.”

Miles Moretti, the president of the foundation, said an auction “doesn’t violate the North American model. It’s just they use the tags in a different way to conserve game. Can a guy buy a tag every year for $200,000? Yes. So it’s not fair? Well, life’s not fair. This is a way to raise money for wildlife.”

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Media Decoder Blog: Robert Thomson to Be Chief of News Corporation's New Publishing Company

Robert Thomson, the top editor at The Wall Street Journal and Dow Jones and a confidante of News Corporation’s chairman and chief executive, Rupert Murdoch, is expected to be named chief executive of the media conglomerate’s newly spun-off publishing company.

Mr. Thomson will run the separate, publicly traded company, which will include The Journal, The New York Post, HarperCollins and a suite of lucrative television assets in Australia. The announcement is expected as early as Monday, according to a person briefed on the company’s decision-making.

Mr. Thomson took over at The Journal in 2008, soon after News Corporation completed its $5.6 billion acquisition of Dow Jones. He serves as managing editor of The Journal and editor in chief of Dow Jones, which also publishes Barron’s and the Dow Jones Newswires.

Gerard Baker, a deputy managing editor at the Journal, will take over for Mr. Thomson at The Journal, said the person briefed on the decisions, who could not discuss private conversations publicly.

At The Journal, Mr. Baker has overseen Washington and political coverage, among other topics. He previously wrote a neoconservative column for The Times of London, also owned by News Corporation, and served as Washington bureau chief at The Financial Times, where Mr. Thomson was the top editor of the United States edition.

Mr. Thomson began his career at News Corporation in 1979 as a reporter at The Herald in Melbourne, Australia. He and Mr. Murdoch are both Australian, and have taken family vacations together. Mr. Murdoch is often seen in Mr. Thomson’s office in the Journal newsroom.

In his tenure at The Journal, Mr. Thomson increased circulation by broadening the newspaper’s focus beyond business to include more general-interest and lifestyle news. He oversaw an expansion of the newsroom budget, added photographs to go along with the paper’s signature dot drawings and introduced a local New York section.

Mr. Murdoch will serve as chairman of the publishing company and remain chief executive of the entertainment company, which will include News Corporation’s movie studio, Fox Broadcasting and cable channels like FX and Fox News.

News Corporation plans to complete its split, which was announced in June, in mid-2013. Additional announcements about the publishing company’s board and cash structure are expected before the end of the year.

A News Corporation spokeswoman declined to comment on the expected appointments, which were first reported in The Journal.

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