Analysis: Republicans start new Congress bruised and divided






WASHINGTON (Reuters) – In the wake of bruising fights in their own ranks over the “fiscal cliff” and aid for victims of superstorm Sandy – Republicans in the U.S. House of Representatives open a new Congress on Thursday more divided than ever.


While their leader, Speaker John Boehner, seems in no danger of losing his position because of the divisions, his ability to speak for his membership in the House appears greatly diminished.






That could not come at a worse time for Republicans as they prepare for their next attempt to get more spending cuts out of President Barack Obama. They will try to use the debt ceiling – and Obama’s request to raise it – as leverage, as they did in 2011.


But if the final days of this Congress were indicative of things to come, Republicans will have a rough time effectively using their majority in the House against Obama, who even Republicans acknowledge is at the top of his game following the Democrat’s re-election in November.


The fiscal cliff battle to avert steep tax hikes and spending cuts that were due to kick in at the start of this year proved gut-wrenching for Republicans.


Obama’s demand for a tax hike on the rich challenged a core principle that has guided Republicans for decades: No new taxes. Ever.


Yet, late on New Year’s night, 85 Republicans in the House did just that, voting to raise income taxes on household income of more than $ 450,000 a year.


Some of the Republican Party’s biggest stars were among the 85 – including Boehner and Paul Ryan, the 2012 Republican vice presidential candidate, who is seen as a conservative anchor.


But 151 House Republicans stood in defiance, leaving Boehner in the unenviable position of having to rely on opposition Democrats to pass major legislation.


Earlier in the fiscal cliff fight, Boehner suffered a humiliating defeat when his “Plan B” solution – which would have limited the tax hikes to income of $ 1 million a year or more, got so little support he had to cancel the vote.


No sooner had the fiscal cliff battle ended than Boehner found himself in trouble with other Republicans over aid for victims of Sandy, the second costliest storm in U.S. history, which smashed New York and New Jersey coastal communities in late October.


Legislation providing disaster relief to New York, New Jersey and other East Coast states was delayed. A House Republican aide said that given Republicans’ frustration with the fiscal cliff bill and its lack of significant spending cuts, “it was not a good time to immediately vote on $ 60 billion in new spending.”


“I don’t enjoy saying this. I consider myself a personal friend of John Boehner’s,” said Republican Representative Peter King of New York. “It pains me to say this, but the fact is that the dismissive attitude that was shown … toward New York, New Jersey and Connecticut typifies, I believe, a strain in the Republican Party.”


Earlier, King had condemned House inaction on Sandy as a “knife in the back.”


Republican Representative Michael Grimm, also of New York, said of Boehner’s refusal to bring the disaster bill to a vote: “There was a betrayal. There was an arrogant judgment that is going to cost I think the trust of the American people.”


Ironically, Grimm first won his seat in Congress in 2010 with the help of conservative Tea Party activists who sometimes show displeasure with disaster aid spending.


By midday on Wednesday, Boehner had changed course, promising a House vote by week’s end on a $ 9 billion down payment in storm assistance, with a second bill providing $ 51 billion to be voted on January 15.


TEA PARTY EFFECT


Paul Light, a New York University professor and a specialist on Congress, said the vote on the fiscal cliff bill could mark the start of a “major realignment” in the run-up to the 2014 congressional elections and the 2016 presidential race.


Republicans who voted for the legislation “are going to have to find a home. They’re not going to find it with the Tea Party,” Light said.


He said that Republicans who were uncomfortable with the Tea Party could begin aligning themselves more closely with a dwindling band of centrist Democrats.


Congressional Republicans, especially in the House, have been buffeted for two years by the Tea Party, which helped them win control of the House in 2010.


Boehner had to navigate Tea Party demands throughout the 2011 fight over raising U.S. borrowing authority or risking a historic government default.


In rapid succession, Tea Party-fueled battles were waged over infrastructure investments, farm subsidies, payroll tax cuts and the fiscal cliff.


At the core of the disputes was whether the government should be made smaller, forcing Boehner to balance that demand with the need to govern and keep the federal government operating in an orderly way.


For all the heartache over the past several weeks as Republicans fought with one another over whether to let taxes on the rich go up, many see better days ahead.


“By and large, people are probably happy to have it behind them. This was obviously the worst part of the fiscal debate,” said one House Republican staffer, referring to the tax hikes.


The staffer added, “Republicans get to point out that we still have a $ 1 trillion deficit and ask Democrats what kind of spending cuts, entitlement reforms they are willing to do to fix it.”


Republicans feel that will be an easier lift for them – one that they can sell to the American public as they move on to the fight over the debt ceiling.


(Editing by Fred Barbash and Peter Cooney)


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China services growth adds to economic revival hopes






BEIJING (Reuters) – Growth in China‘s increasingly important services sector accelerated in December at its fastest pace in four months, adding to signs of a modest year-end revival in the world’s second-largest economy.


China’s official purchasing managers’ index (PMI) for the non-manufacturing sector rose to 56.1 in December from 55.6 in November, the National Bureau of Statistics (NBS) said on Thursday.






Two PMIs on the manufacturing sector earlier this week also suggested China’s economic growth was picking up late in 2012, although signs persist it depends primarily on state-led investment.


Data so far suggests only a muted revival in economic growth, rather than a return to the double-digit pace seen in China over the past three decades, Hong Kong-based economist Dariusz Kowalczyk said.


“Absolute levels of both December manufacturing and non-manufacturing PMIs remain relatively low by historical standards and consistent with only modest rebound in economic activity,” Kowalczyk, Credit Agricole’s senior economist for Asia except Japan, said.


He said economic growth picked up in the fourth quarter of 2012 after sliding for seven straight quarters, but in sharp contrast to China’s previous, more pronounced bull runs, it could fade after the first quarter of 2013.


The greatest driver in the pick up in the non-manufacturing sector in December was a jump in construction services to 61.9 from 61.3 in November. Industries including transport slumped, the NBS said in an accompanying statement.


A reading above 50 indicates growth is accelerating, while one below 50 indicates it is slowing.


The strength in construction services is consistent with other indicators, including rising land prices, that point to a revival in China’s property markets, which support about 40 other industries. Signs of a pick up come despite central government protestations that it will not relax credit and purchasing curbs that have stifled the sector in the past two years.


The transport slowdown is also consistent with weak demand for China’s exports in the face of euro area and Japan recessions and an uncertain fiscal outlook in the United States.


SERVICES GROW IN IMPORTANCE


The official manufacturing PMI survey in December matched November’s seven-month high of 50.6, the NBS said on Tuesday, while a complementary survey with a greater focus on the private sector reached 51.5, its highest since May 2011.


China’s fast-growing services industry has so far weathered the global slowdown much better than the factory sector, with the PMI consistently signaling healthy expansion and hitting a 10-month high of 58.0 in March.


That’s partly due to a maturing economy as well as a historic shift in the last decade leading a majority of Chinese to live and work in cities rather than the countryside.


China’s services sector generated 43 percent of China’s GDP in 2010 and by 2011 provided nearly 36 percent of new jobs, exceeding the agricultural sector for the first time.


Beijing has acknowledged that greater consumer activity is needed to reduce the economy’s reliance on the exports sector and investment-led growth.


“Expanding domestic demand will be a major stimulus for China’s economic growth, and the greatest potential will come from the service sector,” Xia Nong, deputy director-general of the Department of Industry under the National Development and Reform Commission, said on Friday, according to the China Daily.


Xia pledged to open the services sector to more foreign competition as well as encouraging Chinese service firms to go overseas.


Foreign investment into the service sector of $ 47.57 billion in the first 11 months of 2012 surpassed that directed to the manufacturing industry, which slumped by 7.1 percent, the China Daily said over the weekend, citing Ministry of Commerce data.


The growing services sector has taken up some of the slack from the property sector, which has struggled with investment and purchasing restrictions as well as a credit crunch.


Overseas company investment into China’s urban transportation surged 24-fold in the first 11 months from a year ago, followed by a 12-fold rise in telecommunications and other information services, and a sevenfold increase in pipeline transportation industries, at sevenfold, the China Daily said, again citing Ministry of Commerce figures.


The sector, formerly the bastion of smaller private businesses, is now important enough to have its own five-year plan, issued in September.


(Editing by Neil Fullick)


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France counts 1,193 cars torched on New Year’s Eve






PARIS (AP) — A New Year’s Eve tradition for some in France of torching empty, parked cars has continued.


Interior Minister Manuel Valls said Tuesday that 1,193 vehicles were burned overnight around the country, where the stunt began in the 1990s.






There was no way to compare this figure to recent ones because the conservative government of former President Nicolas Sarkozy stopped making the numbers public while he was in office. But the rate of burned cars was apparently steady. On Dec. 31, 2009, 1,147 vehicles were burned.


For some, the decision of France’s current Socialist government to resume making public figures of New Year’s Eve’s torched cars is unwise.


Bruno Beschizza, a security chief for Sarkozy’s UMP party, said on iTele TV that publishing the numbers motivates youths to commit such crimes.


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France counts 1,193 cars torched on New Year’s Eve






PARIS (AP) — A New Year’s Eve tradition for some in France of torching empty, parked cars has continued.


Interior Minister Manuel Valls said Tuesday that 1,193 vehicles were burned overnight around the country, where the stunt began in the 1990s.






There was no way to compare this figure to recent ones because the conservative government of former President Nicolas Sarkozy stopped making the numbers public while he was in office. But the rate of burned cars was apparently steady. On Dec. 31, 2009, 1,147 vehicles were burned.


For some, the decision of France’s current Socialist government to resume making public figures of New Year’s Eve’s torched cars is unwise.


Bruno Beschizza, a security chief for Sarkozy’s UMP party, said on iTele TV that publishing the numbers motivates youths to commit such crimes.


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7 Apps for Creepers






1. Sneakypix


Ever been waiting on the train platform, minding your business, only to glance to your left and find yourself face-to-face with a grown-up nose picker? In this day and age, our first inclination is to snap a discreet photo. Sneakypix makes it appear as if you’re on a phone call, but instead, aim your camera lens at the nasal aficionado and the app will fire off a series of stealth photos or video. Price: $ 0.99


Click here to view this gallery.






[More from Mashable: Mom Gives Son a Christmas iPhone — With Strings Attached]


Do you have a smartphone? Then chances are you’ve been a creeper.


Now don’t get all defensive, just yet. How many times have you snapped a photo of some hipster’s pink beard on the subway? How often do you send racy pictures to your husband during his business trips? How many times have you wondered whether your teenager was smoking pot on the Williamsburg Bridge or visiting his grandma in Queens?


[More from Mashable: 9 Apps to Fast-Track Your New Years’ Resolutions]


While we’re not advocating sinister, paranoid behavior (take a hike, stalkers), sometimes it’s helpful and downright fun to act like James Bond. And it turns out, you don’t need all the slick gadgets to do it.


These seven iPhone and Android apps will get you started, secret agent-style.


But seriously, for the love of Carl, don’t do anything illegal. Mmm-kay?


Image courtesy of iStockphoto, klosfoto


This story originally published on Mashable here.


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Heartwarming moments defy chill at Rose Parade






PASADENA, Calif. (AP) — A couple who became husband and wife on the “Love Float,” a surprise reunion between a returning soldier and his little boy, and a grand marshal famed globally for her chimpanzee research were among the highlights of the 124th Rose Parade on Tuesday.


The parade’s spectacular 42 floral floats brightened an otherwise cloudy New Year’s morning and boosted the spirits of a chilled crowd estimated at some 700,000 spectators lining the 5-mile route.






“The only way that you’re going to experience the Rose Parade is to be here in person,” said Los Angeles resident Gineen Alcantara-Nakama, who camped out Monday night to save front row sidewalk spots.


“Growing up, I watched it on television, but it’s not the same — the smell, the atmosphere, smelling the flowers as they come down the street. And the energy. It’s like being with family all night long.”


Spectators rose to a standing ovation when Army Sgt. First Class Eric Pazz, who was riding on the Natural Balance Pet Foods float along with other service members, got off the float and walked over to his surprised wife Miriam and 4-year-old son Eric Jr., who came running out of the stands into the arms of his 32-year-old father.


Miriam Pazz had been told she had won a contest to attend the parade and did not know her husband, who is deployed in Afghanistan, would be there. A native of Clio, Mich., Pazz is a highly decorated soldier who has also served in Iraq. The family, who currently lives in Germany, climbed aboard the float for the rest of the route.


Cheers also went up for a Chesapeake, Va., couple who tied the knot aboard Farmers Insurance “Love Float.”


Gerald Sapienza and Nicole Angelillo were high school classmates who reconnected 10 years later and won the parade wedding over three other couples in a nationwide contest. They received a trip to Pasadena, a wedding gown, tuxedo, rings, marriage license fees, Rose Bowl game tickets and hair and makeup for the bride.


The parade’s theme this year was “Oh the Places You’ll Go!” named in honor of the Dr. Seuss book. It served as a fitting slogan for grand marshal British primatologist Jane Goodall, who has spent much of her life in Tanzania studying chimpanzees.


Goodall chose conservation as her message for the parade


“My dream for this New Year’s Day is for everyone to think of the places we can all go if we work together to make our world a better place,” said Goodall, 78.


“Every journey starts with a step and I am pleased to see the Tournament of Roses continue to take steps toward not only celebrating beauty and imagination, but also a cleaner environment.”


This year’s parade also saw the first-ever float entered by the Defense Department.


The $ 247,000 military float was a replica of the Korean War Veterans Memorial in Washington to commemorate the veterans from that conflict.


The float that scooped up the parade’s grand “Sweepstakes” prize for the most beautiful floral presentation and design was “Dreaming in Paradise” by fruit and vegetable producer Dole.


According to parade rules, every inch of the floats must be covered with flowers or plant material, most of it applied by volunteers in the last weeks of December.


Besides floats, the parade also featured 23 marching bands and 21 equestrian units from around the world.


Banda El Salvador, a 200-plus member marching band and folkloric dance troupe, played sassy Latin rhythms and paid homage to their Central American country by dressing in the national colors of blue and white and shouting “Arriba El Salvador!”


The Aguiluchos band from Puebla, Mexico, earned cheers for their fancy footwork and vaquero rope tricks. Colorful dancers from Costa Rica and South Korea were other crowd pleasers.


Die-hard parade fans staked out their spots overnight or in pre-dawn hours with folding chairs, hammocks and portable barbeque grills despite frosty temperatures.


Emergency personnel received a number of cold-weather exposure calls, police department spokeswoman Lisa Derderian told City News Service.


As of 8 a.m. Tuesday, police had made a total of 22 arrests along the parade route since 6 p.m. Monday, said police Lt. Rick Aversan. All but one arrest were for suspected public intoxication. The other was for suspected possession of burglary tools that could have been used to break into cars, police said.


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“Fiscal cliff” crisis heads to resolution in Congress






WASHINGTON (Reuters) – A months-long battle over the U.S. “fiscal cliff” headed to a close on Tuesday as the House of Representatives moved toward final approval of a bipartisan deal meant to prevent Washington from pushing the world’s biggest economy into recession.


The Republican-controlled House was expected to back a tax hike on the top U.S. earners shortly before midnight on Tuesday, ending weeks of high-stakes budget brinkmanship that threatened to spook consumers and throw financial markets into turmoil.






Approval of the bill would be a victory for President Barack Obama, who campaigned for re-election last November on a promise to raise taxes on the wealthiest but faced stiff opposition from congressional Republicans.


Republicans had earlier considered adding hundreds of billions of dollars in spending cuts after the bill had already passed the Senate with strong bipartisan support. That would have triggered further partisan warfare and pushed the crisis well past a self-imposed January 1 deadline.


But party leaders abandoned the effort after determining they lacked the votes.


“We’ve gone as far as we can go and I think people are ready to bring it to a conclusion,” Republican Representative Jack Kingston of Georgia said. “We fought the fight.”


Rules Committee Chairman David Dreier, a Republican, predicted the House would back the Senate bill, which also postpones for two months $ 109 billion in spending cuts on military and domestic programs set for 2013.


The bill easily cleared a procedural hurdle by a bipartisan vote of 408 to 10.


Lawmakers have struggled to find a way to head off across-the-board tax hikes and spending cuts that began to take effect at midnight, a legacy of earlier failed budget deals that is known as the fiscal cliff.


Strictly speaking, the United States went over the cliff in the first minutes of the New Year because Congress failed to produce legislation to halt $ 600 billion of tax hikes and spending cuts scheduled for this year.


TAX HIKES FOR WEALTHIEST


While many Republicans were uneasy with the tax hikes and wanted more spending cuts in the bill, they seemed to realize that the fiscal cliff would begin to damage the economy once financial markets and federal government offices returned to work on Wednesday. Opinion polls show the public would blame Republicans if a deal were to fall apart.


House Republicans had earlier considered adding $ 330 billion in spending cuts over 10 years to the Senate bill, which raises taxes on the wealthiest U.S. households by $ 620 billion over the same period.


But Senate Democrats refused to consider any changes to their bill, which passed 89 to 8 in a rare display of unity early Tuesday.


That measure, which passed the Senate at around 2 a.m., would raise income taxes on families earning more than $ 450,000 per year and limit the amount of deductions they can take to lower their tax bill.


Low temporary rates that have been in place for the past decade would be made permanent for less-affluent taxpayers, along with a range of targeted tax breaks put in place to fight the 2009 economic downturn.


However, workers would see up to $ 2,000 more taken out of their paychecks annually with the expiration of a temporary payroll tax cut.


The non-partisan Congressional Budget Office said the Senate bill would increase budget deficits by nearly $ 4 trillion over the coming 10 years, compared to the budget savings that would occur if the extreme measures of the cliff were to kick in.


But the bill would actually save $ 650 billion during that time period when measured against the tax and spending policies that were in effect on Monday, according to the Committee for a Responsible Federal Budget, an independent group that has pushed for more aggressive deficit savings.


(Additional reporting by Rachelle Younglai, Thomas Ferraro and David Lawder; Writing by Andy Sullivan; Editing by Alistair Bell and Eric Beech)


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Obama praises ‘fiscal cliff’ deal









Barack Obama: “The deficit is still too high”



Barack Obama has hailed a deal reached to stave off a “fiscal cliff” of drastic taxation and spending measures as “just one step in the broader effort to strengthen the economy”.


The US president was speaking after the House of Representatives passed a Senate-backed bill by 257 votes to 167.


It raises taxes for the wealthy and delays spending cuts for two months.


There had been intense pressure for the vote to be passed before financial markets reopened on Wednesday.


In Tuesday night’s house vote, 172 Democrats and 85 Republicans voted in favour of the bill.


It had been passed in the Senate less than 24 hours earlier by 89 votes to eight after lengthy talks between Vice-President Joe Biden and Senate Republicans.


Economists’ warnings


Continue reading the main story

At the scene




In the end, it was settled after a tense meeting of House Republicans in a basement conference room.


When a stony-faced Speaker John Boehner left the room an hour later, one Congressman was overheard telling someone on the phone it was “looking like a long night”. Out of the basement, the smell of pizza wafted through the ornate House corridors. If the fiscal cliff was going to hurt ordinary Americans, the threat of it did no harm to one pizza parlour just a short hop down Pennsylvania Avenue.


Before the final vote, dissenters and supporters lined up to make their point. “Common sense has prevailed,” one Democrat declared; a prominent Republican said he simply did not believe spending cuts would eventually be delivered. But as the votes rolled in, House members stood on the floor and watched as the scoreboard lit up, and applauded – briefly – when the crucial 217th vote was cast.



Speaking before returning to Hawaii for his interrupted Christmas holiday, Mr Obama said that in signing the law he was fulfilling a campaign pledge.


“I will sign a law that raises taxes on the wealthiest 2% of Americans… while preventing a middle-class tax hike,” he told a White House press conference.


The US deficit was still too high, he said: While open to compromise on budgetary issues, he would not offer Congress spending cuts in return for lifting the government’s borrowing limit, known as the debt ceiling.


“There is a path forward, if we focus not on politics, but on what’s right for the country,” added Mr Obama.


The “fiscal cliff” measures – cutting spending and increasing taxes dramatically – came into effect automatically at midnight on Monday when George W Bush-era tax cuts expired.


The 1 January deadline triggered tax increases of about $ 536bn and spending cuts of $ 109bn from domestic and military programmes.


Continue reading the main story

What is the fiscal cliff?


  • On 1 January 2013, tax rises and huge spending cuts come into force – the so-called fiscal cliff

  • The deadline was put in place in 2011 to force the president and Congress to reach agreement on the budget over the next 10 years

  • Date coincides with expiry of Bush-era tax cuts

  • There are fears that raising taxes while massively cutting spending will have a huge impact on households and businesses

  • The fiscal squeeze could also push the US into recession, and have a global impact


Economists had warned that if the full effects of the fiscal cliff were allowed to take hold, the resulting reduction in consumer spending could have sparked a new recession.


The compromise deal extends the tax cuts for Americans earning under $ 400,000 (£246,000) – up from the $ 250,000 level Democrats had originally sought.


In addition to the income tax rates and spending cuts, the package includes:


  • Rises in inheritance taxes from 35% to 40% after the first $ 5m for an individual and $ 10m for a couple

  • Rises in capital taxes – affecting some investment income – of up to 20%, but less than the 39.6% that would prevail without a deal

  • One-year extension for unemployment benefits, affecting two million people

  • Five-year extension for tax credits that help poorer and middle-class families

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Pope marks end of difficult year, notes God’s good






VATICAN CITY (AP) — Pope Benedict XVI marked the end of a difficult year Monday by saying that despite all the death and injustice in the world, goodness prevails.


Benedict celebrated New Year’s Eve with a vespers service in St. Peter’s Basilica to give thanks for 2012 and look ahead to 2013. He appeared tired during the service and used a cane afterward — an indication that the busy Christmas season may be taking a toll on the 85-year-old Benedict.






In his homily, Benedict said it’s tough to remember that goodness prevails when bad news — death, violence and injustice — “makes more noise than good.” He said taking time to meditate in prolonged reflection and prayer can help “find healing from the inevitable wounds of daily life.”


This past year was full of highs and lows for the pope, including a successful trip to Mexico and Cuba but also the betrayal of his butler, convicted in October of stealing Benedict’s personal papers and leaking them to a journalist.


After the service, Benedict was brought out in a covered car to pray before the Vatican’s main nativity scene in St. Peter’s Square. Walking with a cane in the chilly piazza, Benedict chatted animatedly with the artist who crafted the scene, which recreated an entire village from the poor, southern Italian region of Basilicata which donated this year’s crèche.


The Vatican gladly accepted Basilicata’s donation after the €550,000 price tag the Vatican paid for the 2009 nativity scene was revealed in the documentation leaked by Benedict’s ex-butler Paolo Gabriele.


Gabriele was convicted of aggravated theft by a Vatican tribunal and sentenced to 18 months in prison. He received a pre-Christmas papal pardon and is expected to soon leave his Vatican City apartment for a new home and job elsewhere.


On Tuesday morning, Benedict celebrates a New Year’s Day Mass, which the Catholic Church celebrates as its world day of peace.


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Pope marks end of difficult year, notes God’s good






VATICAN CITY (AP) — Pope Benedict XVI marked the end of a difficult year Monday by saying that despite all the death and injustice in the world, goodness prevails.


Benedict celebrated New Year’s Eve with a vespers service in St. Peter’s Basilica to give thanks for 2012 and look ahead to 2013. He appeared tired during the service and used a cane afterward — an indication that the busy Christmas season may be taking a toll on the 85-year-old Benedict.






In his homily, Benedict said it’s tough to remember that goodness prevails when bad news — death, violence and injustice — “makes more noise than good.” He said taking time to meditate in prolonged reflection and prayer can help “find healing from the inevitable wounds of daily life.”


This past year was full of highs and lows for the pope, including a successful trip to Mexico and Cuba but also the betrayal of his butler, convicted in October of stealing Benedict’s personal papers and leaking them to a journalist.


After the service, Benedict was brought out in a covered car to pray before the Vatican’s main nativity scene in St. Peter’s Square. Walking with a cane in the chilly piazza, Benedict chatted animatedly with the artist who crafted the scene, which recreated an entire village from the poor, southern Italian region of Basilicata which donated this year’s crèche.


The Vatican gladly accepted Basilicata’s donation after the €550,000 price tag the Vatican paid for the 2009 nativity scene was revealed in the documentation leaked by Benedict’s ex-butler Paolo Gabriele.


Gabriele was convicted of aggravated theft by a Vatican tribunal and sentenced to 18 months in prison. He received a pre-Christmas papal pardon and is expected to soon leave his Vatican City apartment for a new home and job elsewhere.


On Tuesday morning, Benedict celebrates a New Year’s Day Mass, which the Catholic Church celebrates as its world day of peace.


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