'Fiscal cliff' aftermath: Fights loom on spending cuts, debt ceiling












President Barack Obama and congressional Republicans looked ahead today toward the next round of even bigger budget fights after reaching a hard-fought "fiscal cliff" deal that narrowly averted potentially devastating tax hikes and spending cuts.


The agreement, approved late on Tuesday by the Republican-led House of Representatives after a bitter political struggle, was a victory for Obama, who had won re-election on a promise to address budget woes in part by raising taxes on the wealthiest Americans.











But it set up political showdowns over the next two months on spending cuts and on raising the nation's limit on borrowing. Republicans, angry the deal did little to curb the federal deficit, promised to use the debt ceiling debate to win deep spending cuts next time.


Republicans, who acknowledged they had lost the fiscal cliff fight by agreeing to raise taxes on the wealthy without gaining much in return, vowed the next deal would have to include significant cuts in government benefit programs like Medicare and Medicaid health care for retirees and the poor that were the biggest drivers of federal debt.


"This is going to be much uglier to me than the tax issue … this is going to be about entitlement reform," Republican Senator Bob Corker of Tennessee said on CNBC.


Obama urged "a little less drama" when the Congress and White House next address thorny fiscal issues like the government's rapidly mounting $16 trillion debt load.


While the tax package that Congress passed will protect 99 percent of Americans from an income tax increase, most of them will still end up paying more federal taxes in 2013.


That's because the legislation did nothing to prevent a temporary reduction in the Social Security payroll tax from expiring. In 2012, that 2-percentage-point cut in the payroll tax was worth about $1,000 to a worker making $50,000 a year.


The Tax Policy Center, a nonpartisan Washington research group, estimates that 77 percent of American households will face higher federal taxes in 2013 under the agreement negotiated between President Barack Obama and Senate Republicans. High-income families will feel the biggest tax increases, but many middle- and low-income families will pay higher taxes too.


Households making between $40,000 and $50,000 will face an average tax increase of $579 in 2013, according to the Tax Policy Center's analysis. Households making between $50,000 and $75,000 will face an average tax increase of $822.


"For most people, it's just the payroll tax," said Roberton Williams, a senior fellow at the Tax Policy Center.


The tax increases could be a lot higher. A huge package of tax cuts first enacted under President George W. Bush was scheduled to expire Tuesday as part of the "fiscal cliff." The Bush-era tax cuts lowered taxes for families at every income level, reduced investment taxes and the estate tax, and enhanced a number of tax credits, including a $1,000-per-child credit.


The package passed Tuesday by the Senate and House extends most the Bush-era tax cuts for individuals making less than $400,000 and married couples making less than $450,000.


Obama said the deal "protects 98 percent of Americans and 97 percent of small business owners from a middle-class tax hike. While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country."


The income threshold covers more than 99 percent of all households, exceeding Obama's claim, according to the Tax Policy Center. However, the increase in payroll taxes will hit nearly every wage earner.


Social Security is financed by a 12.4 percent tax on wages up to $113,700, with employers paying half and workers paying the other half. Obama and Congress reduced the share paid by workers from 6.2 percent to 4.2 percent for 2011 and 2012, saving a typical family about $1,000 a year.


Obama pushed hard to enact the payroll tax cut for 2011 and to extend it through 2012. But it was never fully embraced by either party, and this time around, there was general agreement to let it expire.


The new tax package would increase the income tax rate from 35 percent to 39.6 percent on income above $400,000 for individuals and $450,000 for married couples. Investment taxes would increase for people who fall in the new top tax bracket.


High-income families will also pay higher taxes this year as part of Obama's 2010 health care law. As part of that law, a new 3.8 percent tax is being imposed on investment income for individuals making more than $200,000 a year and couples making more than $250,000.


Together, the new tax package and Obama's health care law will produce significant tax increases for many high-income families.





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U.N. lifts Syria death toll to "truly shocking" 60,000


AMMAN/GENEVA (Reuters) - More than 60,000 people have died in Syria's uprising and civil war, the United Nations said on Wednesday, dramatically raising the death toll in a struggle that shows no sign of ending.


In the latest violence, dozens were killed in a rebellious Damascus suburb when a government air strike turned a petrol station into an inferno, incinerating drivers who had rushed there for a rare chance to fill their tanks, activists said.


"I counted at least 30 bodies. They were either burnt or dismembered," said Abu Saeed, an activist who arrived in the area an hour after the 1 p.m. (1100 GMT) raid in Muleiha, a suburb on the eastern edge of the capital.


U.N. Human Rights Commissioner Navi Pillay said in Geneva that researchers cross-referencing seven sources over five months of analysis had listed 59,648 people killed in Syria between March 15, 2011 and November 30, 2012.


"The number of casualties is much higher than we expected and is truly shocking," she said. "Given that there has been no let-up in the conflict since the end of November, we can assume that more than 60,000 people have been killed by the beginning of 2013."


There was no breakdown by ethnicity or information about whether the dead were rebels, soldiers or civilians. There was also no estimate of an upper limit of the possible toll.


Previously, the opposition-linked Syrian Observatory for Human Rights monitoring group put the toll at around 45,000 confirmed dead but said the real number was likely to be higher.


FATAL RUSH FOR PETROL


Muleiha, the target of Wednesday's air strike, is a residential and industrial area in the eastern Ghouta region of Damascus that also houses a Syrian air defense base.


Video footage taken by activists showed the body of a man in a helmet still perched on a motorcycle amid flames engulfing the scene. Another man was shown carrying a dismembered body.


The video could not be verified. The government bars access to the Damascus area to most international media.


The activists said rockets were fired from the base at the petrol station and a nearby residential area after the air raid.


"Until the raid, Muleiha was quiet. We have been without petrol for four days and people from the town and the countryside rushed to the station when a state consignment came in," Abu Fouad, another activist at the scene, said by phone.


In Damascus, President Bashar al-Assad's forces fired artillery and mortars at the eastern districts of Douma, Harasta, Irbin and Zamlaka, where rebels are active, activists living there said.


Assad's forces control the centre of the capital, while rebels and their sympathizers hold a ring of southern and eastern suburbs that are often hit from the air.


The Observatory said a separate air strike killed 12 members of a family, most of them children, in Moadamiyeh, a southwestern district near the centre of Damascus where rebels have fought for a foothold.


The family of an American freelance journalist, James Foley, 39, said on Wednesday he had been missing in Syria since being kidnapped six weeks ago by gunmen. No group has publicly claimed responsibility for his abduction.


Syria was by far the most dangerous country for journalists in 2012, with 28 killed there.


The conflict began in March 2011 with peaceful protests against four decades of Assad family rule and turned into an armed revolt after months of government repression.


Insurgents trying to topple Assad see his air power as their main threat. They hold swathes of eastern and northern provinces, as well as some outlying parts of Damascus, but have been unable to protect their territory from relentless attack by helicopters and jets.


In the north, rebels, some from Islamist units, attacked the Afis military airport near Taftanaz air base, firing machineguns and mortars at helicopters on the ground to try and make a dent in Assad's air might, the Observatory said.


The al Qaeda-linked al-Nusra Front, Ahrar al-Sham Brigade and other units in northwestern Idlib province were attacking the base, which is near the main north-south highway linking Damascus to Aleppo, Syria's biggest city, the Observatory said.


In recent months, rebel units have besieged military bases, especially along the highway, Syria's main artery.


The Observatory's director, Rami Abdelrahman, said the attack was the latest of several attempts to capture the base. A satellite image of the airport shows more than 40 helicopter landing pads, a runway and aircraft hangars.


Syrian state media gave no immediate account of the Damascus air strikes or the fighting in the north.


"FOR GOD'S EYES"


Both sides have been accused of committing atrocities in the 21-month-old conflict, but the United Nations says the government and its allies have been more culpable.


In the latest evidence of atrocities, Internet video posted by Syrian rebels shows armed men, apparently fighters loyal to Assad, stabbing two men to death and stoning them with concrete blocks in a summary execution lasting several minutes.


Reuters could not verify the provenance of the footage or the identity of the perpetrators and their victims. The video was posted on Tuesday but it was not clear where or when it was filmed. However it does clearly show a summary execution and torture, apparently being carried out by government supporters.


At one point, one of the perpetrators says: "For God's eyes and your Lord, O Bashar," an Arabic incantation suggesting actions being carried out in the leader's name.


The video was posted on YouTube by the media office of the Damascus-based rebel First Brigade, which said it had been taken from a captured member of the shabbiha pro-government militia.


The perpetrators show off for the camera, smiling for close-up shots, slicing at the victims' backs, then stabbing them and bashing them with large slabs of masonry.


Syria's civil war is the longest and deadliest conflict to emerge from uprisings that began sweeping the Arab world in 2011 and has developed a significant sectarian element.


Rebels, mostly from the Sunni Muslim majority, confront Assad's army and security forces, dominated by his Shi'ite-derived Alawite sect, which, along with some other minorities, fears revenge if he falls.


(Additional reporting by Oliver Holmes in Beirut; Writing by Peter Graff; Editing by Alistair Lyon/Mark Heinrich)



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"Fiscal cliff" moves to House, timing and outcome uncertain


WASHINGTON (Reuters) - Washington's last-minute scramble to step back from a recession-inducing "fiscal cliff" shifted to the Republican-controlled House of Representatives on Tuesday after the Senate approved a bipartisan deal to avoid steep tax hikes and spending cuts.


In a rare late-night show of unity, the Senate voted 89 to 8 to raise some taxes on the wealthy while keeping income taxes low on more moderate income voters.


The bill's prospects were less certain in the House, where a vote had not yet been scheduled. Many conservative Republicans have rejected tax increases on any Americans, no matter how wealthy. Some liberal Democrats were also upset with a complex deal that they thought gave away too much.


Lingering uncertainty over U.S. tax and spending policy has unnerved investors and depressed business activity for months, and lawmakers had hoped to reach a deal before Tuesday, when a broad range of automatic tax increases and spending cuts would begin to punch a $600 billion hole in the economy.


Financial markets have avoided a steep plunge on the assumption that Washington would ultimately avoid pushing the country off the fiscal cliff into a recession.


With financial markets closed for the New Year's Day holiday, lawmakers have one more day to close the deal.


"My district cannot afford to wait a few days and have the stock market go down 300 points tomorrow if we don't get together and do something," Representative Steve Cohen, a Democrat from Tennessee, said on the House floor.


The bill passed by the Senate at around 2 a.m. would raise income taxes on families earning more than $450,000 per year. Low temporary rates that have been in place for less affluent taxpayers for the past decade would be made permanent, along with a range of targeted tax breaks put in place by President Barack Obama in the depths of the 2009 recession.


However, workers would see up to $2,000 more taken out of their paychecks as a temporary payroll tax cut was set to expire.


The bill would also delay an across-the-board 8 percent spending cut to domestic and military programs for two months, and extend jobless benefits for 2 million people who otherwise would see them run out.


Obama in a statement on Monday urged the House to vote. "There's more work to do to reduce our deficits, and I'm willing to do it," he said.


Republicans had hoped to include significant spending cuts in the deal to narrow trillion-dollar budget deficits. Conservatives were already looking forward to the next battle over the debt ceiling, in late February, to extract deficit reduction measures from the Democratic president.


Vice President Joe Biden, who was instrumental in pushing through the Senate measure, was scheduled to address a closed-door meeting of House Democrats. Their support likely will be needed to pass the bill.


Republican members were to meet to discuss "a path forward," a senior aide said.


The meeting could help Republicans leaders decide when to begin consideration of the White House-backed measure. A vote could come later in the day, but was not yet scheduled.


The conservative Club for Growth urged a "no" vote on the Senate measure, saying it would be on its "congressional scorecard" used to challenge members of Congress.


Liberal groups also have urged Democrats to reject the deal.


Richard Trumka, head of the AFL-CIO labor union, wrote on Twitter that the deal does not raise taxes enough on the wealthy and "sets the stage for more hostage taking" by Republicans in future budget confrontations.


Republican Representative Tom Cole said his House colleagues should pass the Senate bill rather than try to change it.


"We ought to take this deal right now, and we'll live to fight another day," Cole said on MSNBC. "Putting to bed this thing before the markets (open on Wednesday) is really a pretty important thing to do."


(Writing by Andy Sullivan; Editing by Fred Barbash and Vicki Allen)



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Reid among 7 NFL coaches sacked in firing frenzy


Andy Reid is the winningest coach in the history of the Philadelphia Eagles. Lovie Smith led the Chicago Bears to the 2007 Super Bowl.


Now they're looking for work.


Seven coaches and five general managers were fired Monday in a flurry of pink slips that were delivered the day after the regular-season ended.


Ken Whisenhunt is out after helping Arizona reach the Super Bowl following the 2008 season. Also gone: Norv Turner in San Diego, Pat Shurmur in Cleveland, Romeo Crennel in Kansas City and Chan Gailey in Buffalo.


Three teams made it a clean sweep, saying goodbye to the GM along with the coach — San Diego, Cleveland, Arizona. General managers also were fired in Jacksonville and New York, where Rex Ryan held onto his coaching job with the Jets despite a losing record.


Reid was the longest tenured of the coaches, removed after 14 seasons and a Super Bowl appearance in 2005 — a loss to New England. Smith spent nine seasons with the Bears.


Turner has now been fired as head coach by three teams. San Diego won the AFC West from 2006-09, but didn't make the postseason the last three years under Turner and GM A.J. Smith.


"Both Norv and A.J. are consummate NFL professionals, and they understand that in this league, the bottom line is winning," Chargers President Dean Spanos said in a statement.


Whisenhunt was fired after six seasons. He had more wins than any other coach in Cardinals history, going 45-51, and has one year worth about $5.5 million left on his contract. GM Rod Graves had been with Arizona for 16 years, nine in his current position. A 5-11 record after a 4-0 start cost him and Whisenhunt their jobs.


Gailey was dumped after three seasons with the Bills; Shurmur after two; and Crennel had one full season with the Chiefs.


Reid took over a 3-13 Eagles team in 1999, drafted Donovan McNabb with the No. 2 overall pick and quickly turned the franchise into a title contender.


But the team hasn't won a playoff game since 2008 and after last season's 8-8 finish, owner Jeffrey Lurie said he was looking for improvement this year. Instead, it was even worse. The Eagles finished 4-12.


"When you have a season like that, it's embarrassing. It's personally crushing to me and it's terrible," Lurie said at a news conference. He said he respects Reid and plans to stay friends with him, "but, it is time for the Eagles to move in a new direction."


Shurmur went 9-23 in his two seasons with the Browns, who will embark on yet another offseason of change — the only constant in more than a decade of futility. Cleveland has lost at least 11 games in each of the past five seasons and made the playoffs just once since returning to the NFL as an expansion team in 1999.


"Ultimately our objective is to put together an organization that will be the best at everything we do," Browns CEO Joe Banner said. "On the field, our only goal is trying to win championships."


Crennel took over with three games left in the 2011 season after GM Scott Pioli fired Todd Haley. Kansas City will have the No. 1 pick in the NFL draft as a result of having one of the worst seasons in its 53-year history. The only other time the Chiefs finished 2-14 was 2008, the year before Pioli was hired.


"I am embarrassed by the poor product we gave our fans this season, and I believe we have no choice but to move the franchise in a different direction," Chiefs chairman Clark Hunt said in a statement.


Gailey, the former Dallas Cowboys coach, compiled a 16-32 record in his three seasons in Buffalo, never doing better than 6-10.


"This will probably be, and I say probably, but I think it will be the first place that's ever fired me that I'll pull for," Gailey said.


Smith and the Bears went 10-6 this season and just missed a playoff spot. But Chicago started 7-1 and has struggled to put together a productive offense throughout Smith's tenure. His record was 81-63 with the Bears, and he took them to one Super Bowl loss and to one NFC championship game defeat.


Receiver and kick return standout Devin Hester was bitter about Smith's firing.


"The media, the false fans, you all got what you all wanted," Hester said as he cleared out his locker. "The majority of you all wanted him out. As players we wanted him in. I guess the fans — the false fans — outruled us. I thought he was a great coach, probably one of the best coaches I've ever been around."


The fired GMs included Mike Tannenbaum of the Jets; Gene Smith of the Jaguars; Tom Heckert of the Browns; Smith of the Chargers and Graves of Arizona.


"You hope that those guys that obviously were victims of black Monday land on their feet," Rams coach Jeff Fisher said. "You've got guys that have been to Super Bowls and won championship games and all of a sudden they've forgot how to coach, I guess."


___


Online: http://pro32.ap.org/poll and http://twitter.com/AP_NFL


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7 Ways to Have a Happy New Year






Feeling grateful makes people feel good: That’s not just intuition, it’s science.


Research also shows it’s possible to cultivate an attitude of gratitude. One of the creators of the World Gratitude Map, Jacqueline Lewis, shares some tips on how to feel more grateful, and happier, in your New Year.






Once you find your sources of gratitude, you can post them to the web-based Map, which helps people around the world record and share the things for which they feel grateful.


1. Slow down and take notice: Pick three good things that you see or experience during the day, then write them down or post them on the World Gratitude Map. You can also throw a quarter or a dollar in a jar. When it’s filled, treat yourself, or better yet, someone else, Lewis suggests.


2. Saying thank you: Take time to thank someone every day, anything from a card to an email or a hand on the shoulder will do. Connecting with others this way will help you get outside of your own head, Lewis said. Research that came out in May revealed a simple “thank you” may boost relationship satisfaction. The undergraduates in the study, detailed in the Journal of Personality and Social Psychology, reported feeling more appreciative of their partners the day after they themselves felt more appreciated. Those who felt appreciated were also less likely to break up in the following nine months, saying they felt even more committed to each other at that time.


3. Build in ways to help others: For example, Lewis recalls throwing a party and asking that, in lieu of gifts, guests bring gift cards to donate to a local shelter. Science has shown those people who buy gifts for friends or give charitable donations experience a happiness boost not seen in individuals who spend on themselves. That study was published in 2008 in the journal Science. [7 Things That Will Make You Happy]


4. Feel your feelings: If you miss someone, don’t try to escape the feeling; instead use it to feel thankful. When missing her mom, who passed away in 2011, Lewis remembered how her mother used to re-arrange the furniture when she was stressed. So, to thanks her mother, Lewis re-arranged her own furniture. “You are not going to avoid the loss and the sadness, but you can take control of it,” Lewis said.


5. Find ways to connect to faraway loved ones: Around Easter one year, when Lewis’ mother was dying, Lewis said she brought friends and family together in spirit, or at least costume, by asking everyone to send photos of themselves wearing bunny ears for “Bunnyfest.” Another example: Lewis said her sister and a remote friend have used Skype to cook together.


6. Be creative with nostalgia: Make a whimsical photo album to enjoy. Include silly pictures of yourself or friends, and take a look back at it every so often. Turns out, nostalgia really can warm the heart: Research has found a sentimental longing or wistful affection for the past can warm up the body. In addition, looking at the past in a rosy light, such as with silly photo journeys, can really boost happiness. This phenomenon may explain why extroverts are happier than other personality types, according to a study published in 2011 in the journal Personality and Individual Differences.


7. Notice what you have: One Christmas, Lewis received a gift that made her cringe: a bright-yellow ski suit. When she opened it, she envisioned herself as a big lemon, tumbling down a slope. Her husband at the time, who had given it to her, tried to explain: “It’s the yellow snowsuit.” Then she realized he was referring to a story she’d told him about the moment she felt most loved and safe, when her mother was zipping her into a yellow snowsuit as a young child. Her then-husband had wanted to replicate that moment for her. The lesson: “We have an idea of what the holidays should look like, what we are entitled to, what love looks like, what happiness looks like, and then we are measuring our life against this idealistic version of what we should have,” she said. “That is what stands in the way of noticing what we have.”


Follow LiveScience on Twitter @livescience. We’re also on Facebook & Google+.


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13 key stories to watch for in 2013




Among the few virtual certainties of 2013 is the ongoing anguish of Syria and the decline of its president, Bashar al-Assad.




STORY HIGHLIGHTS


  • Look for more unrest amid power transitions in the Middle East

  • Disputes and economic worries will keep China, Japan, North Korea in the news

  • Europe's economy will stay on a rough road, but the outlook for it is brighter

  • Events are likely to draw attention to cyber warfare and climate change




(CNN) -- Forecasting the major international stories for the year ahead is a time-honored pastime, but the world has a habit of springing surprises. In late 1988, no one was predicting Tiananmen Square or the fall of the Berlin Wall. On the eve of 2001, the 9/11 attacks and the subsequent invasion of Afghanistan were unimaginable. So with that substantial disclaimer, let's peer into the misty looking glass for 2013.


More turmoil for Syria and its neighbors


If anything can be guaranteed, it is that Syria's gradual and brutal disintegration will continue, sending aftershocks far beyond its borders. Most analysts do not believe that President Bashar al-Assad can hang on for another year. The more capable units of the Syrian armed forces are overstretched; large tracts of north and eastern Syria are beyond the regime's control; the economy is in dire straits; and the war is getting closer to the heart of the capital with every passing week. Russian support for al-Assad, once insistent, is now lukewarm.


Amid the battle, a refugee crisis of epic proportions threatens to become a catastrophe as winter sets in. The United Nations refugee agency says more than 4 million Syrians are in desperate need, most of them in squalid camps on Syria's borders, where tents are no match for the cold and torrential rain. Inside Syria, diseases like tuberculosis are spreading, according to aid agencies, and there is a danger that hunger will become malnutrition in places like Aleppo.


The question is whether the conflict will culminate Tripoli-style, with Damascus overrun by rebel units; or whether a political solution can be found that involves al-Assad's departure and a broadly based transitional government taking his place. U.N. envoy Lakhdar Brahimi has not been explicit about al-Assad's exit as part of the transition, but during his most recent visit to Damascus, he hinted that it has to be.









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"Syria and the Syrian people need, want and look forward to real change. And the meaning of this is clear to all," he said.


The international community still seems as far as ever from meaningful military intervention, even as limited as a no fly-zone. Nor is there any sign of concerted diplomacy to push all sides in Syria toward the sort of deal that ended the war in Bosnia. In those days, the United States and Russia were able to find common ground. In Syria, they have yet to do so, and regional actors such as Turkey, Qatar, Saudi Arabia and Iran also have irons in the fire.


Failing an unlikely breakthrough that would bring the regime and its opponents to a Syrian version of the Dayton Accords that ended the Bosnian war, the greatest risk is that a desperate regime may turn to its chemical weapons, troublesome friends (Hezbollah in Lebanon and the Kurdish PKK in Turkey) and seek to export unrest to Lebanon, Iraq and Jordan.


The Syrian regime has already hinted that it can retaliate against Turkey's support for the rebels -- not by lobbing Scud missiles into Turkey, but by playing the "Kurdish" card. That might involve direct support for the PKK or space for its Syrian ally, the Democratic Union Party. By some estimates, Syrians make up one-third of the PKK's fighting strength.


To the Turkish government, the idea that Syria's Kurds might carve out an autonomous zone and get cozy with Iraq's Kurds is a nightmare in the making. Nearly 800 people have been killed in Turkey since the PKK stepped up its attacks in mid-2011, but with three different sets of elections in Turkey in 2013, a historic bargain between Ankara and the Kurds that make up 18% of Turkey's population looks far from likely.


Many commentators expect Lebanon to become more volatile in 2013 because it duplicates so many of the dynamics at work in Syria. The assassination in October of Lebanese intelligence chief Brig. Gen. Wissam al-Hassan -- as he investigated a pro-Syrian politician accused of obtaining explosives from the Syrian regime -- was an ominous portent.


Victory for the overwhelmingly Sunni rebels in Syria would tilt the fragile sectarian balance next door, threatening confrontation between Lebanon's Sunnis and Hezbollah. The emergence of militant Salafist groups like al-Nusra in Syria is already playing into the hands of militants in Lebanon.


Iraq, too, is not immune from Syria's turmoil. Sunni tribes in Anbar and Ramadi provinces would be heartened should Assad be replaced by their brethren across the border. It would give them leverage in an ever more tense relationship with the Shia-dominated government in Baghdad. The poor health of one of the few conciliators in Iraqi politics, President Jalal Talabani, and renewed disputes between Iraq's Kurds and the government over boundaries in the oil-rich north, augur for a troublesome 2013 in Iraq.


More worries about Iran's nuclear program


Syria's predicament will probably feature throughout 2013, as will the behavior of its only friend in the region: Iran. Intelligence sources say Iran continues to supply the Assad regime with money, weapons and expertise; and military officers who defected from the Syrian army say Iranian technicians work in Syria's chemical weapons program. Al-Assad's continued viability is important for Iran, as his only Arab ally. They also share sponsorship of Hezbollah in Lebanon, which, with its vast supply of rockets and even some ballistic missiles, might be a valuable proxy in the event of an Israeli strike against Iran's nuclear program.


Speaking of which, there are likely to be several more episodes in the behind-closed-doors drama of negotiations on Iran's nuclear sites. Russia is trying to arrange the next round for January. But in public, at least, Iran maintains it has every right to continue enriching uranium for civilian purposes, such as helping in the treatment of more than 1 million Iranians with cancer.


Iran "will not suspend 20% uranium enrichment because of the demands of others," Fereydoun Abbasi-Davani, head of Iran's Atomic Energy Organization, said this month.


International experts say the amount of 20% enriched uranium (estimated by the International Atomic Energy Agency in November at 297 pounds) is more than needed for civilian purposes, and the installation of hundreds more centrifuges could cut the time needed to enrich uranium to weapons-grade. The question is whether Iran will agree to intrusive inspections that would reassure the international community -- and Israel specifically -- that it can't and won't develop a nuclear weapon.


This raises another question: Will it take bilateral U.S.-Iranian talks -- and the prospect of an end to the crippling sanctions regime -- to find a breakthrough? And will Iran's own presidential election in June change the equation?


For now, Israel appears to be prepared to give negotiation (and sanctions) time to bring Iran to the table. For now.


Egypt to deal with new power, economic troubles


Given the turmoil swirling through the Middle East, Israel could probably do without trying to bomb Iran's nuclear program into submission. Besides Syria and Lebanon, it is already grappling with a very different Egypt, where a once-jailed Islamist leader is now president and Salafist/jihadi groups, especially in undergoverned areas like Sinai, have a lease on life unimaginable in the Mubarak era.



The U.S. has an awkward relationship with President Mohamed Morsy, needing his help in mediating with Hamas in Gaza but concerned that his accumulation of power is fast weakening democracy and by his bouts of anti-Western rhetoric. (He has demanded the release from a U.S. jail of Sheikh Omar Abdel Rahman, convicted of involvement in the first bombing of the World Trade Center in 1993.)


The approval of the constitution removes one uncertainty, even if the opposition National Salvation Front says it cements Islamist power. But as much as the result, the turnout -- about one-third of eligible voters -- indicates that Egyptians are tired of turmoil, and more concerned about a deepening economic crisis.


Morsy imposed and then scrapped new taxes, and the long-expected $4.8 billion loan from the International Monetary Fund is still not agreed on. Egypt's foreign reserves were down to $15 billion by the end of the year, enough to cover less than three months of imports. Tourism revenues are one-third of what they were before street protests erupted early in 2011. Egypt's crisis in 2013 may be more about its economy than its politics.


Libya threatens to spawn more unrest in North Africa


Libya's revolution, if not as seismic as anything Syria may produce, is still reverberating far and wide. As Moammar Gadhafi's rule crumbled, his regime's weapons found their way into an arms bazaar, turning up in Mali and Sinai, even being intercepted off the Lebanese coast.


The Libyan government, such as it is, seems no closer to stamping its authority on the country, with Islamist brigades holding sway in the east, tribal unrest in the Sahara and militias engaged in turf wars. The danger is that Libya, a vast country where civic institutions were stifled for four decades, will become the incubator for a new generation of jihadists, able to spread their influence throughout the Sahel. They will have plenty of room and very little in the way of opposition from security forces.


The emergence of the Islamist group Ansar Dine in Mali is just one example. In this traditionally moderate Muslim country, Ansar's fighters and Tuareg rebels have ejected government forces from an area of northern Mali the size of Spain and begun implementing Sharia law, amputations and floggings included. Foreign fighters have begun arriving to join the latest front in global jihad; and terrorism analysts are seeing signs that al Qaeda in the Islamic Maghreb (AQIM) and groups like Boko Haram in Nigeria are beginning to work together.


There are plans for an international force to help Mali's depleted military take back the north, but one European envoy said it was unlikely to materialize before (wait for it) ... September 2013. Some terrorism analysts see North Africa as becoming the next destination of choice for international jihad, as brigades and camps sprout across a vast area of desert.


A bumpy troop transition for Afghanistan


The U.S. and its allies want to prevent Afghanistan from becoming another haven for terror groups. As the troop drawdown gathers pace, 2013 will be a critical year in standing up Afghan security forces (the numbers are there, their competence unproven), improving civil institutions and working toward a post-Karzai succession.



In November, the International Crisis Group said the outlook was far from assuring.


"Demonstrating at least will to ensure clean elections (in Afghanistan in 2014) could forge a degree of national consensus and boost popular confidence, but steps toward a stable transition must begin now to prevent a precipitous slide toward state collapse. Time is running out," the group said.


Critics have also voiced concerns that the publicly announced date of 2014 for withdrawing combat forces only lets the Taliban know how long they must hold out before taking on the Kabul government.


U.S. officials insist the word is "transitioning" rather than "withdrawal," but the shape and role of any military presence in 2014 and beyond are yet to be settled. Let's just say the United States continues to build up and integrate its special operations forces.


The other part of the puzzle is whether the 'good' Taliban can be coaxed into negotiations, and whether Pakistan, which has considerable influence over the Taliban leadership, will play honest broker.


Private meetings in Paris before Christmas that involved Taliban envoys and Afghan officials ended with positive vibes, with the Taliban suggesting they were open to working with other political groups and would not resist girls' education. There was also renewed discussion about opening a Taliban office in Qatar, but we've been here before. The Taliban are riven by internal dissent and may be talking the talk while allowing facts on the ground to work to their advantage.


Where will North Korea turn its focus?


On the subject of nuclear states that the U.S.-wishes-were-not, the succession in North Korea has provided no sign that the regime is ready to restrain its ambitious program to test nuclear devices and the means to deliver them.



Back in May 2012, Peter Brookes of the American Foreign Policy Council said that "North Korea is a wild card -- and a dangerous one at that." He predicted that the inexperienced Kim Jong Un would want to appear "large and in charge," for internal and external consumption. In December, Pyongyang launched a long-range ballistic missile -- one that South Korean scientists later said had the range to reach the U.S. West Coast. Unlike the failure of the previous missile launch in 2009, it managed to put a satellite into orbit.


The last two such launches have been followed by nuclear weapons tests -- in 2006 and 2009. Recent satellite images of the weapons test site analyzed by the group 38 North show continued activity there.


So the decision becomes a political one. Does Kim continue to appear "large and in charge" by ordering another test? Or have the extensive reshuffles and demotions of the past year already consolidated his position, allowing him to focus on the country's dire economic situation?


China-Japan island dispute to simmer


It's been a while since East Asia has thrown up multiple security challenges, but suddenly North Korea's missile and nuclear programs are not the only concern in the region. There's growing rancor between China and Japan over disputed islands in the East China Sea, which may be aggravated by the return to power in Japan of Shinzo Abe as prime minister.


Abe has long been concerned that Japan is vulnerable to China's growing power and its willingness to project that power. Throughout 2012, Japan and China were locked in a war of words over the Senkaku or Diaoyu islands, with fishing and Coast Guard boats deployed to support claims of sovereignty.


In the days before Japanese went to the polls, Beijing also sent a surveillance plane over the area, marking the first time since 1958, according to Japanese officials, that Bejing had intruded into "Japanese airspace." Japan scrambled F-15 jets in response.


The islands are uninhabited, but the seas around them may be rich in oil and gas. There is also a Falklands factor at play here. Not giving in to the other side is a matter of national pride. There's plenty of history between China and Japan -- not much of it good.


As China has built up its ability to project military power, Japan's navy has also expanded. Even a low-level incident could lead to an escalation. And as the islands are currently administered by Japan, the U.S. would have an obligation to help the Japanese defend them.


Few analysts expect conflict to erupt, and both sides have plenty to lose. For Japan, China is a critical market, but Japanese investment there has fallen sharply in the past year. Just one in a raft of problems for Abe. His prescription for dragging Japan out of its fourth recession since 2000 is a vast stimulus program to fund construction and other public works and a looser monetary policy.


The trouble is that Japan's debt is already about 240% of its GDP, a much higher ratio than even Greece. And Japan's banks hold a huge amount of that debt. Add a shrinking and aging population, and at some point the markets might decide that the yield on Japan's 10-year sovereign bond ought to be higher than the current 0.77%.


Economic uncertainty in U.S., growth in China


So the world's third-largest economy may not help much in reviving global growth, which in 2012 was an anemic 2.2%, according to United Nations data. The parts of Europe not mired in recession hover close to it, and growth in India and Brazil has weakened. Which leaves the U.S. and China.


At the time of writing, the White House and congressional leadership are still peering over the fiscal cliff. Should they lose their footing, the Congressional Budget Office expects the arbitrary spending cuts and tax increases to be triggered will push the economy into recession and send unemployment above 9%.



A stopgap measure, rather than a long-term foundation for reducing the federal deficit, looks politically more likely. But to companies looking for predictable economic policy, it may not be enough to unlock billions in investment. Why spend heavily if there's a recession around the corner, or if another fight looms over raising the federal debt ceiling?


In September, Moody's said it would downgrade the U.S. sovereign rating from its "AAA" rating without "specific policies that produce a stabilization and then downward trend in the ratio of federal debt to GDP over the medium term." In other words, it wants action beyond kicking the proverbial can.


Should the cliff be dodged, most forecasts see the U.S. economy expanding by about 2% in 2013. That's not enough to make up for stagnation elsewhere, so a great deal depends on China avoiding the proverbial hard landing.


Until now, Chinese growth has been powered by exports and infrastructure spending, but there are signs that China's maturing middle class is also becoming an economic force to be reckoned with. Consultants PwC expect retail sales in China to increase by 10.5% next year -- with China overtaking the U.S. as the world's largest retail market by 2016.


Europe's economic outlook a little better


No one expects Europe to become an economic powerhouse in 2013, but at least the horizon looks a little less dark than it did a year ago. The "PIGS' " (Portugal, Ireland/Italy, Greece, Spain) borrowing costs have eased; there is at least rhetorical progress toward a new economic and fiscal union; and the European Central Bank has talked tough on defending the Eurozone.


Mario Draghi, president of the European Central Bank, fended off the dragons with the declaration in July that "Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough."



Draghi has promised the bank has unlimited liquidity to buy sovereign debt, as long as governments (most likely Spain) submit to reforms designed to balance their budgets. But in 2013, the markets will want more than brave talk, including real progress toward banking and fiscal union that will leave behind what Draghi likes to call Europe's "fairy world" of unsustainable debt and collapsing banks. Nothing can be done without the say-so of German Chancellor Angela Merkel, renowned for a step-by-step approach that's likely to be even more cautious in a year when she faces re-election.


Elections in Italy in February may be more important -- pitching technocrat Prime Minister Mario Monti against the maverick he replaced, 76-year old Silvio Berlusconi. After the collapse of Berlusconi's coalition 13 months ago, Monti reined in spending, raised the retirement age and raised taxes to bring Italy back from the brink of insolvency. Now he will lead a coalition of centrist parties into the election. But polls suggest that Italians are tired of Monti's austerity program, and Berlusconi plans a populist campaign against the man he calls "Germano-centric."


The other tripwire in Europe may be Greece. More cuts in spending -- required to qualify for an EU/IMF bailout -- are likely to deepen an already savage recession, threatening more social unrest and the future of a fragile coalition. A 'Grexit' from the eurozone is still possible, and that's according to the Greek finance minister, Yannis Stournaras.


Expect to see more evidence of climate change


Hurricane Sandy, which struck the U.S. East Coast in November, was the latest indicator of changing and more severe weather patterns. Even if not repeated in 2013, extreme weather is beginning to have an effect -- on where people live, on politicians and on the insurance industry.


After Sandy, New York Gov. Andrew Cuomo said that after "the last few years, I don't think anyone can sit back anymore and say, 'Well, I'm shocked at that weather pattern.' " The storm of the century has become the storm of every decade or so, said Michael Oppenheimer, professor of geosciences at Princeton.


"Climate change will probably increase storm intensity and size simultaneously, resulting in a significant intensification of storm surges," he and colleagues wrote in Nature.


In the U.S., government exposure to storm-related losses in coastal states has risen more than 15-fold since 1990, to $885 billion in 2011, according to the Insurance Information Institute. The Munich RE insurance group says North America has seen higher losses from extreme weather than any other part of the world in recent decades.


"A main loss driver is the concentration of people and assets on the coast combined with high and possibly growing vulnerabilities," it says.


Risk Management Solutions, which models catastrophic risks, recently updated its scenarios, anticipating an increase of 40% in insurance losses on the Gulf Coast, Florida and the Southeast over the next five years, and 25% to 30% for the mid-Atlantic and Northeastern states. Those calculations were done before Sandy.



Inland, eyes will be trained on the heavens for signs of rain -- after the worst drought in 50 years across the Midwest. Climatologists say that extended periods of drought -- from the U.S. Midwest to Ukraine -- may be "the new normal." Jennifer Francis at the Institute of Marine and Coastal Sciences at Rutgers University has shown that a warmer Arctic tends to slow the jet stream, causing it to meander and, in turn, prolong weather patterns. It's called Arctic amplification, and it is probably aggravating drought in the Northwest United States and leading to warmer summers in the Northern Hemisphere, where 2012 was the hottest year on record.


It is a double-edged sword: Warmer temperatures may make it possible to begin cultivating in places like Siberia, but drier weather in traditional breadbaskets would be very disruptive. The U.N. Food and Agriculture Organization reports that stocks of key cereals have tightened, contributing to volatile world markets. Poor weather in Argentina, the world's second-largest exporter of corn, may compound the problem.


More cyber warfare


What will be the 2013 equivalents of Flame, Gauss and Shamoon? They were some of the most damaging computer viruses of 2012. The size and versatility of Flame was unlike nothing seen before, according to anti-virus firm Kaspersky Lab.



Gauss stole online banking information in the Middle East. Then came Shamoon, a virus that wiped the hard drives of about 30,000 computers at the Saudi oil company Aramco, making them useless. The Saudi government declared it an attack on the country's economy; debate continues on whether it was state-sponsored.


Kaspersky predicts that in 2013, we will see "new examples of cyber-warfare operations, increasing targeted attacks on businesses and new, sophisticated mobile threats."


Computer security firm McAfee also expects more malware to be developed to attack mobile devices and apps in 2013.


U.S. Defense Secretary Leon Panetta is more concerned about highly sophisticated attacks on infrastructure that "could be as destructive as the terrorist attack on 9/11."


"We know that foreign cyber actors are probing America's critical infrastructure networks. They are targeting the computer control systems that operate chemical, electricity and water plants and those that guide transportation throughout this country," he said in October.


Intellectual property can be stolen, bought or demanded as a quid pro quo for market access. The U.S. intelligence community believes China or Chinese interests are employing all three methods in an effort to close the technology gap.


In the waning days of 2012, the interagency Committee on Foreign Investment in the United States said "there is likely a coordinated strategy among one or more foreign governments or companies to acquire U.S. companies involved in research, development, or production of critical technologies."


It did not name the country in its unclassified report but separately noted a growing number of attempts by Chinese entities to buy U.S. companies.


Who will be soccer's next 'perfect machine'?



There's room for two less serious challenges in 2013. One is whether any football team, in Spain or beyond, can beat Barcelona and its inspirational goal machine Lionel Messi, who demolished a record that had stood since 1972 for the number of goals scored in a calendar year. (Before Glasgow Celtic fans start complaining, let's acknowledge their famous win against the Spanish champions in November.)


Despite the ill health of club coach Tito Vilanova, "Barca" sits imperiously at the top of La Liga in Spain and is the favorite to win the world's most prestigious club trophy, the European Champions League, in 2013. AC Milan is its next opponent in a match-up that pits two of Europe's most storied clubs against each other. But as Milan sporting director Umberto Gandini acknowledges, "We face a perfect machine."


Will Gangnam give it up to something sillier?



Finally, can something -- anything -- displace Gangnam Style as the most watched video in YouTube's short history? As of 2:16 p.m. ET on December 26, it had garnered 1,054,969,395 views and an even more alarming 6,351,871 "likes."


Perhaps in 2013 the YouTube audience will be entranced by squirrels playing table tennis, an octopus that spins plates or Cistercian nuns dancing the Macarena. Or maybe Gangnam will get to 2 billion with a duet with Justin Bieber.







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Bears general manager: 'We need to consistently be in the playoffs'









A day after the Chicago Bears fired head coach Lovie Smith, general manager Phil Emery explained his decision to the media at Halas Hall.

"It was a tough day in many ways," Emery said of Smith's firing Monday. "It was a tough decision. Lovie had a good run here with good, competitive teams."

Emery said the firing wasn't totally decided until Monday morning when he sat down and told Smith directly. He said missing the playoffs for the fifth time in six years and the team's struggles on offense were the key factors in his decision.

"The end result was we didn't have enough consistency," Emery said. "That part -- not getting into the playoffs on a consistent basis, being able to be meet our organizational goal to be in the hunt to win championshps -- I made the change moving forward. ... We need to consistently be in the playoffs competing for championships."

Emery said he spent his first year in his role as GM evaluating the entire operation. Of the offense, he said, "We haven't had the balance, we have not had consistency on the offensive side of the ball. We have gone through a number of coordinators."

Emery said he discussed his decision with team chairman George McCaskey and president Ted Phillips but was given the authority to make the call.

Emery said he will handle the initial coaching interviews by himself and that McCaskey and Phillips will be involved on finalists' interviews. Emery said he would be looking at all levels -- former head coaches, current coordinators, college coaches -- for potential candidates. He said being an NFL head coach was a "24/7 job."

"I want somebody that has high energy," Emery said. "Somebody that pulls people together in the building. ... Upbeat and positive. Everybody has a different personality ... but those qualities are paramount."

Emery said working well with the media and presenting a good public image also were important factors.

"I want somebody who's good on their feet," he said. "I think working with the media -- not only in Chicago but in a national sense -- is very important. I want this person to stand up and represent us well.


"Wins and losses weigh heavily week to week. There needs to be a level of consistency in this individual and how he presents himself. Not only when we're up but when we're down, and how we're going to rebound from being down."


Emery said the search for Smith’s replacement into high gear.





"We do have candidates lined up to talk to this week, we have candidates lined up for the following week," he said. "It's an ongoing process and we are working through a wide variety of people. No one has been excluded. It's an open process. I want to talk to these individuals, listen to them, listen to their thoughts about how they can lead the Chicago Bears toward excellence."


Emery said he would conduct the search "with a sense of urgency," but "it's important that we be very thorough to get the absolute right person."

He said "the (ongoing) playoffs are a consideration ... There may be a candidate who is in the playoffs that may be unavailable to us that we might have to wait out."

Emery said money was not a consideration in firing Smith with a year left on his deal and won't be in deciding on candidates, declining to rule out big-name hires.

"We want to win now," Emery said. "We want that championship now."

Emery said he wants an adaptable coach who can find ways to win with the players on hand, speaking both of quarterback Jay Cutler and also about the defense in terms of using a 4-3 or a 3-4 scheme.

"It's real important to find the person to make things fit with the players we have," Emery said.

Emery said he considered Cutler a "franchise quarterback" that the team needs to "build around," but as to whether he is the long-term solution, he said, "That answer is going to come as we move forward with the new head coach."

"Jay has won a lot of games," Emery said. "We need to build around him."

Regarding the offense, Emery said, "We need to get better in the midfield area at making plays. (Tight end) Kellen (Davis) had a rough year. ... He has shown ability, but for whatever reason hasn't been consistent."

Emery said receiver Earl Bennett "showed us his talent in the last game (at Detroit)," but noted that the team needed to get more consistency and said running back Matt Forte was under-utilized in the passing game.

That would seem to point to offensive coordinator Mike Tice, but Emery said, "I'm not looking to blame anybody."

Emery said he would be open to a coach who wanted to call his own offensive plays if that candidate convinced him that was the best way to go.

Emery said some of the assistant coaches could be retained.

Emery wouldn't get into Brian Urlacher's future with the team but acknowledged that his "leadership and knowledge" would be hard to replace.

"Coming back from his (knee) injury there was a time when he looked a little rusty," Emery said. "There was a time he looked better. .... Did he make progress? Yes, he did."

Emery pointed to the offensive line as a major problem area: "We've got to get better."

Emery said that when he became GM, he recognized that the Bears needed an upgrade at wide receiver, pass rusher and offensive line in particular. The trade acquisition of Brandon Marshall, the drafting of defensive end Shea McClellin receiver Alshon Jeffery and the signing of tackle Jonathan Scott were meant to address those concerns. He noted that Scott did not allow a sack all season.

Emery conceded that firing Smith was not popular with Bears players.

"There is always going to be disagreements," he said. "I have had players come by and talk to me."

Emery already got started on his search Monday, setting up interviews with Atlanta Falcons special teams coach Keith Armstrong, Denver Broncos offensive coordinator Mike McCoy and Tampa Bay Buccaneers offensive coordinator Mike Sullivan.  Those interviews are scheduled for this week.

Many more interviews are expected to follow, as Emery is likely to have an expansive search process that encompasses many kinds of candidates.

Smith was fired after a 10-6 season.  The Bears missed the playoffs, as they had in five of the previous six years.  His inability to fix the offense was an issue throughout his nine seasons in Chicago.

But Smith also will be remembered for his excellent defenses that came up with takeaways better than any team in the NFL throughout his tenure.

While the Bears are looking for Smith’s replacement, Smith is expected to be a candidate for other NFL head-coaching jobs.  ESPN’s John Clayton reported Smith has been contacted by four teams, and Smith is expected to be a candidate for the Cardinals and Bills jobs.

dpompei@tribune.com
Twitter@danpompei





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About 60 crushed to death in Ivory Coast stampede


ABIDJAN (Reuters) - About 60 people were crushed to death in a stampede outside a stadium in Ivory Coast's main city of Abidjan after a New Year's Eve fireworks display, the government said on Tuesday.


The incident took place near Felix Houphouet Boigny Stadium where a crowd had gathered to watch fireworks, emergency officials said.


One of the injured, speaking to Reuters at a hospital, said security forces had arrived to break up the crowd, triggering a panic in which many people fell over and were trampled.


"The provisional death toll is 60 and there are 49 injured," Interior Minister Hamed Bakayoko said in a statement broadcast on national television.


President Alassane Ouattara, visiting injured people at the hospital, called the incident a national tragedy and said an investigation was underway to determine what happened.


A Reuters correspondent said blood stains and abandoned shoes littered the scene outside the stadium on Tuesday morning.


"My two children came here yesterday. I told them not to come but they didn't listen. They came when I was sleeping. What will I do?" said Assetou Toure, a cleaner.


She did not know if her children had escaped unhurt.


The incident was the worst of its kind in Abidjan since 2010, when a stampede at a stadium during a football match killed 18 people.


Ivory Coast, once a stable economic hub for West Africa, is struggling to recover from a 2011 civil war in which more than 3,000 people were killed.


(Reporting by Loucoumane Coulibaly and Alain Amontchi; Writing by Richard Valdmanis; Editing by Angus MacSwan)



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Wall Street rallies on signs of "cliff" progress


NEW YORK (Reuters) - Stocks extended gains, with the Nasdaq up 1 percent on Monday on news that the majority of Senate Republicans are expected to support a tentative deal on the "fiscal cliff."


The market also got a lift from news that President Barack Obama will make a statement on the fiscal cliff at 1:30 p.m. EST at an event with "middle-class Americans," the White House said.


The Dow Jones industrial average <.dji> was up 82.99 points, or 0.64 percent, at 13,021.10. The Standard & Poor's 500 Index <.spx> was up 12.66 points, or 0.90 percent, at 1,415.09. The Nasdaq Composite Index <.ixic> was up 37.11 points, or 1.25 percent, at 2,997.43.


(Reporting by Angela Moon; Editing by Jan Paschal)



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Who might fill the NFL coaching openings


When NFL coaching jobs open, the names Jon Gruden, Bill Cowher and Tony Dungy immediately surface as potential candidates.


Much more likely than any of those Super Bowl winners returning to the sideline for 2013 would be the hirings of more obscure assistant coaches such as Mike Zimmer, Mike McCoy and Gus Bradley.


And Jon Gruden's brother, Jay.


Sure, some of the best-known coaches, including Andy Reid and Lovie Smith, who lost their jobs Monday, will be in the mix. So might college coaches Chip Kelly of Oregon and Bill O'Brien of Penn State.


Maybe even Nick Saban, although leaving Alabama for the NFL is a long shot.


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Online: http://pro32.ap.org/poll and http://twitter.com/AP_NFL


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