Video shows teens joking about alleged rape victim

(CBS) In August, the family of a 16-year-old girl accused multiple Steubenville, Ohio, high school students of raping her while she was passed out during a night of pre-football-season partying.

Two Steubenville High School football players have been indicted for rape, and the case is set to go to trial in February. But on Wednesday, a video appeared online that depicts teenage males who appear to be joking about details of the alleged rape.

The nearly 13-minute video posted on YouTube consists mostly of one teenage male hysterically laughing as he entertains an unseen cameraman and others in the room with remarks such as "They raped her harder than that cop raped Marcellus Wallace in 'Pulp Fiction'," and, "They raped her quicker than Mike Tyson raped that one girl." 

The New York Times reported last month that photos of the alleged rape victim were posted on social media. In one, according to the paper, the girl "is shown looking unresponsive as two boys carry her by her wrists and ankles."

The case has generated controversy partly because it has been playing out online, and partly because in Steubenville, where the high school football team is a source of great civic pride, the Times reports that some say the incident is an example of the perils inherent in granting teen athletes special stature. 

Multiple versions of the video were posted on YouTube on Jan. 2. A group of hackers called KnightSec, who claim affiliation with Anonymous, say they have collected and posted information about the students accused in the attack - as well as those they believe shot and appeared in the video. In an online message, the group threatened to release what they compiled, "unless all accused parties come forward by new years day and issue a public apology to the girl and her family."

The video, which has more than 100,000 total views, appears to have been recorded on the night of the incident. One male recalls seeing the girl vomit, and more than one of the males refer to "that girl" as being drunk. So drunk, apparently, that the teen on whose face the video camera is focused cracks himself up joking that she is "so dead."

"She is deader than Trayvon Martin," he laughs, referring to the Florida teen killed in February 2012.

The teen also makes remarks implying that he may have witnessed at least some of the incident: "You didn't see how they carried her out," he says. And: "They peed on her, that's how you know she's dead."

And also: "She is so raped right now."

The alleged victim is not named in the video and her name has not been released. CBS affiliate WTRF reports that Anonymous plans to rally in support of the alleged victim at the Jefferson County Courthouse on Jan. 5.

Steubenville Police Chief Bill McCafferty did not return Crimesider's calls for comment, but released a statement to WTRF that reads, in part, "The Steubenville police department has been aware of this recent video that was released. Since late August 2012 the subject who made the video was interviewed. This has all been turned over to the prosecutors which are the Ohio Attorney General's Office, who is prosecuting this case."

In the video now being circulated, excerpts of which are above, one voice off camera tells the speaker, "this isn't funny" and that his remarks are "childish."

"That's like, rape," says the unseen male. "They raped her."

"What if that was your daughter?" says another off-camera male.

"But it isn't," says the teen making the jokes. "If that was my daughter I wouldn't care, I'd just let her be dead."

Eventually, someone asks the cameraman, "Are you still videotaping?"

The cameraman replies with a laugh: "Yes."

Additional reporting by Will Goodman

Read More..

Chelsea Clinton Raises Profile During Mom's Illness

While Hillary Clinton was in the hospital it was daughter Chelsea -- not the secretary of state or the former president Bill Clinton -- who spoke for the family.

She, along with the State Department, doled out what little information the family wanted to share in a series of tweets and when her mother was released from the hospital, it was Chelsea who delivered the thanks on behalf of her parents, tweeting her gratitude to the doctors as well as those who kept her mother in their thoughts while she recovered from a blood clot.

When Hillary Clinton leaves office, possibly at the end of this month, it will be the first time since 1982 that a Clinton will not be holding a public office.

The watch will be on whether Hillary Clinton makes another run for the White House in 2016, but almost inevitably people will also be watching to see if Chelsea Clinton decides to run for office, too.

"Americans always look for dynasties: Bush, Kennedy, Cuomo, Clinton … it's some kind of continuity. There will always be pressure on her to run for public office," said Hank Sheinkopf, a Democratic political strategist in New York.

"She's learning from the two best politicians in recent American history and she understands when to hold them and when to fold them," Sheinkopf said.

That sense of dynasty could also present a significant hurdle.

James Devaney/Getty Images

Secretary of State Clinton: Mystery Health Issues Watch Video

Secretary of State Hillary Clinton Undergoing Blood-Thinning Therapy Watch Video

"She's got to A, demonstrate that she has the charisma of her father, or B, demonstrate that she has the policy chops of her mother. And I think like most people she is somewhere in between," a former Hillary Clinton aide from her 2008 campaign said. "People are judging her through each of her parents and it's an impossible standard."

Chelsea Clinton, 32, has inched towards a possible political career in recent statements and has become more politically active.

In an interview with Vogue published in August she was more open to it than she has been in the past, telling the magazine, "Before my mom's (presidential) campaign I would have said no," but "now I don't know."

"I believe that engaging in the political process is part of being a good person. And I certainly believe that part of helping to build a better world is ensuring that we have political leaders who are committed to that premise. So if there were to be a point where it was something I felt called to do and I didn't think there was someone who was sufficiently committed to building a healthier, more just, more equitable, more productive world? Then that would be a question I'd have to ask and answer."

Clinton also spoke of a change in her private to public life:

"Historically I deliberately tried to lead a private life in the public eye," she told the magazine. "And now I am trying to lead a purposefully public life."

Besides her work as a special correspondent with NBC, Chelsea Clinton has taken on high profile roles with her father's Clinton Global Initiative. She sits on several corporate boards and has both moderated and sat on panels discussing both women in politics and childhood obesity, among other issues.

She has also worked toward making same-sex marriage legal in New York last year, as well as gay marriage referendums in Maine, Maryland, Wisconsin and Washington state, all of which were successful in November. She has also been active in superstorm Sandy recovery, most notably delivering aid to the devastated Rockaways with her father.

Read More..

Why U.S. lives under the shadow of 'W'

Julian Zelizer says former President George W. Bush's key tax and homeland security policies survive in the age of Obama

STORY HIGHLIGHTS

• Julian Zelizer: For all the criticism Bush got, two key policies have survived


• He says fiscal cliff pact perpetuates nearly all of Bush's tax cuts


• Obama administration has largely followed Bush's homeland security policy, he says


• Zelizer: By squeezing revenues, Bush tax cuts will put pressure on spending

Editor's note: Julian Zelizer is a professor of history and public affairs at Princeton University. He is the author of "Jimmy Carter" and of "Governing America."

Princeton, New Jersey (CNN) -- Somewhere in Texas, former President George W. Bush is smiling.

Although some Democrats are pleased that taxes will now go up on the wealthiest Americans, the recent deal to avert the fiscal cliff entrenches, rather than dismantles, one of Bush's signature legacies -- income tax cuts. Ninety-nine percent of American households were protected from tax increases, aside from the expiration of the reduced rate for the payroll tax.

Julian Zelizer

In the final deal, Congress and President Barack Obama agreed to preserve most of the Bush tax cuts, including exemptions on the estate tax.

When Bush started his term in 2001, many of his critics dismissed him as a lightweight, the son of a former president who won office as result of his family's political fortune and a controversial decision by the Supreme Court on the 2000 election.

But what has become clear in hindsight, regardless of what one thinks of Bush and his politics, is that his administration left behind a record that has had a huge impact on American politics, a record that will not easily be dismantled by future presidents.

The twin pillars of Bush's record were counterterrorism policies and tax cuts. During his first term, it became clear that Obama would not dismantle most of the homeland security apparatus put into place by his predecessor. Despite a campaign in 2008 that focused on flaws with the nation's response to 9/11, Obama has kept most of the counterterrorism program intact.

Opinion: The real issue is runaway spending

In some cases, the administration continues to aggressively use tactics his supporters once decried, such as relying on renditions to detain terrorist suspects who are overseas, as The Washington Post reported this week. In other areas, the administration has expanded the war on terrorism, including the broader use of drone strikes to kill terrorists.

Now come taxes and spending.

With regard to the Bush tax cuts, Obama had promised to overturn a policy that he saw as regressive. Although he always said that he would protect the middle class from tax increases, Obama criticized Bush for pushing through Congress policies that bled the federal government of needed revenue and benefited the wealthy.

In 2010, Obama agreed to temporarily extend all the tax cuts. Though many Democrats were furious, Obama concluded that he had little political chance to overturn them and he seemed to agree with Republicans that reversing them would hurt an economy limping along after a terrible recession.

Opinion: Time to toot horn for George H.W. Bush

With the fiscal cliff deal, Obama could certainly claim more victories than in 2010. Taxes for the wealthiest Americans will go up. Congress also agreed to extend unemployment compensation and continue higher payments to Medicare providers.

But beneath all the sound and fury is the fact that the 2001 and 2003 tax cuts, for most Americans, are now a permanent part of the legislative landscape. (In addition, middle class Americans will breathe a sigh of relief that Congress has permanently fixed the Alternative Minimum Tax, which would have hit many of them with a provision once designed to make sure that the wealthy paid their fair share.)

As Michigan Republican Rep. Dave Camp remarked, "After more than a decade of criticizing these tax cuts, Democrats are finally joining Republicans in making them permanent." Indeed, the Congressional Budget Office estimates that the new legislation will increase the deficit by $4 trillion over the next 10 years.

The tax cuts have significant consequences on all of American policy.

Opinion: Christie drops bomb on GOP leaders

Most important, the fact that a Democratic president has now legitimated the moves of a Republican administration gives a bipartisan imprimatur to the legitimacy of the current tax rates.

Although some Republicans signed on to raising taxes for the first time in two decades, the fact is that Democrats have agreed to tax rates which, compared to much of the 20th century, are extraordinarily low. Public perception of a new status quo makes it harder for presidents to ever raise taxes on most Americans to satisfy the revenue needs for the federal government.

At the same time, the continuation of reduced taxes keeps the federal government in a fiscal straitjacket. As a result, politicians are left to focus on finding the money to pay for existing programs or making cuts wherever possible.

New innovations in federal policy that require substantial revenue are just about impossible. To be sure, there have been significant exceptions, such as the Affordable Care Act. But overall, bold policy departures that require significant amounts of general revenue are harder to come by than in the 1930s or 1960s.

Republicans thus succeed with what some have called the "starve the beast" strategy of cutting government by taking away its resources. Since the long-term deficit only becomes worse, Republicans will continue to have ample opportunity to pressure Democrats into accepting spending cuts and keep them on the defense with regards to new government programs.

Politics: Are the days of Congress 'going big' over?

With his income tax cuts enshrined, Bush can rest comfortably that much of the policy world he designed will remain intact and continue to define American politics. Obama has struggled to work within the world that Bush created, and with this legislation, even with his victories, he has demonstrated that the possibilities for change have been much more limited than he imagined when he ran in 2008 or even in 2012.

Follow us on Twitter @CNNOpinion

Join us on Facebook/CNNOpinion

The opinions expressed in this commentary are solely those of Julian Zelizer.

Read More..

141 journalists killed in 2012: media watchdog

GENEVA: Last year was one of the deadliest on record for journalists, with 141 killed in 29 different countries and Syria the most dangerous place on earth for reporters, a media watchdog said Thursday.

The Swiss-based Press Emblem Campaign (PEC), which fights for the protection of journalists, said the figure was up by 31 percent on 2011.

At least 37 journalists, among them 13 working for foreign media, were killed in Syria, it said in a statement.

Four journalists are reported missing or detained: Ukrainian Anhar Kochneva, Jordanian-Palestinian Bashar Fahmi, freelance US reporter Austin Tice and another American reporter James Foley, who has contributed video to Agence France-Presse.

The situation in Somalia has deteriorated dramatically, where 19 were killed, said the PEC.

Three Latin American countries followed among the most dangerous places: Mexico with 11 journalists killed, Brazil also with 11 dead, and Honduras, where six journalists were killed.

The Philippines ranked number seven with six killed, followed by Bangladesh and India with four each, said the PEC.

The New York-based Committee to Protect Journalists for its part said last month that 67 reporters were killed in 2012, up 42 percent from the previous year, due in large part to the Syria conflict, shootings in Somalia, violence in Pakistan and killings of reporters in Brazil.

The Paris-based press rights group Reporters without Borders (RSF) meanwhile put the number of those killed at 88 last year.

-AFP/fl

Read More..

New Congress, old drama

STORY HIGHLIGHTS

• The fiscal cliff was averted, but issues like the the sequester and debt ceiling await


• The new Congress will vote on $60 billion in aid to Superstorm Sandy victims


• House Speaker John Boehner canceled the vote on the aid in light of the fiscal cliff vote


• Democrats gain seats in both chambers, but Republicans keep control of the House

(CNN) -- A new Congress takes office Thursday, and many of the same difficult issues that snagged the last one will fall into its lap.

President Barack Obama has signed into law a bill to avert the fiscal cliff, a deal worked out after lengthy, grinding friction between Democrats and Republicans. The political theatrics kept Americans and people around the world on pins and needles over how the outcome would affect the shaky global economy.

But the sequester -- a set of automatic spending cuts of up to 10% to the budgets of most agencies and programs -- lies ahead. It has been pushed back to the end of February.

At about the same time, a decision on the debt ceiling that the last Congress postponed will be due.

As an early order of business, the new Congress will address the massive aid package for Superstorm Sandy victims. House Speaker John Boehner scrapped a vote to approve the $60 billion measure late Tuesday in the wake of the vote on the fiscal cliff bill, triggering irate reactions from politicians in both parties from New York and New Jersey.

Republican Gov. Chris Christie of New Jersey attacked his own party members in Washington, blasting "the toxic internal politics of the House majority."

A vote on $9 billion for immediate aid is now set for Friday, with the balance of $51 billion due for consideration January 15.

Stocks start 2013 with broad gains

There have been subtle changes in the makeup of the lawmaking bodies.

Although Republicans retained control of the House after the 2012 elections, Democrats gained seats in that chamber. They also expanded their control of the Senate.

Republicans will fill 234 seats in the new House, down from 242. Democrats will take 201, up from 193.

In the Senate, voters handed two former GOP seats to Democrats for a new balance of 55-45. The 55 Democratic seats include two independents who caucus with the party.

The small shift in numbers could make a difference in votes across party lines.

How much more you'll pay under fiscal cliff deal

The House will vote on its speaker position, and their are questions about whether Boehner will receive the gavel again in light of recent tensions.

The House vote on a deal approved by the Senate also split the parties, but enough Republicans crossed party lines for the bill to pass handily with a 257-167 vote. On Tuesday night, 172 Democrats and 85 Republicans favored the bill; 16 Democrats and 151 Republicans opposed it.

Congress also passed a bill approving defense expenditures, which the president signed into law.

A number of moderates on both sides lost their seats in the House, which is likely to make the lawmaking body even more polarized.

Partisan banter and stern words form the president preceded the convening of the 113th Congress on 1/3/13.

Before leaving Washington for Hawaii on Tuesday night, Obama warned Congress that he will not tolerate another act of prolonged brinksmanship.

"While I will negotiate over many things, I will not have another debate with this Congress over whether or not they should pay the bills that they've already racked up through the laws that they've passed," he said.

Hours later Senate Minority Leader Mitch McConnell swiped back at the president in an op-ed piece he wrote for Yahoo News.

"I have news for him," McConnell wrote. "The moment that he and virtually every elected Democrat in Washington signed off on the terms of the current arrangement, it was the last word on taxes. That debate is over."

But to get through the debt ceiling, the self-imposed limit on how much the U.S. government may borrow, there will have to be debate over spending, he insisted.

The ceiling of $16.394 trillion has already been reached.

CNN's Josh Levs, Tom Watkins, Holly Yan, Robert Yoon and Ashley Killough contributed to this report

Read More..

Obama signs "fiscal cliff" bill

HONOLULU President Obama signed a bill late Wednesday night boosting taxes on the wealthiest Americans, while preserving tax cuts for most American households.

The bill, which averts a looming fiscal cliff that had threatened to plunge the nation back into recession, also extends expiring jobless benefits, prevents cuts in Medicare reimbursements to doctors and delays for two months billions of dollars in across-the-board spending cuts in defense and domestic programs.

The GOP-run House approved the measure by a 257-167 vote late Tuesday, nearly 24 hours after the Democratic-led Senate passed it 89-8.

Obama, who is vacationing in Hawaii, signed the bill using an autopen, a mechanical device that copies his signature.

Play Video

"Cliff" deal loaded with special interest tax breaks

The "fiscal cliff" law passed so quickly, many in Congress never realized it was full of special interest tax breaks, reports CBS News correspondent Wyatt Andrews.

One allows auto racetrack owners to speed up their tax deductions. Another tax write off goes to Hollywood -- a $20 million break anytime a TV show or movie is shot in an economically depressed area of the United States.

There's a subsidy for rum made in Puerto Rico, a tax break if you train a mine rescue worker, and a tax credit for every kilowatt of electricity produced by wind.

All told, the fiscal cliff law designed to reduce the deficit, added $74 billion in spending through changes in the tax law.

Read More..

Senate Swears in Historic 20th Female Senator

Today the Senate will make history, swearing in a record-breaking 20 female senators – 4 Republicans and 16 Democrats – in office.

As the 113th Congress is sworn in today on Capitol Hill, ABC "World News" anchor Diane Sawyer has an exclusive joint interview with the historic class of female Senators.

Diane Sawyer's complete interview will air on World News this evening.

"I can't tell you the joy that I feel in my heart to look at these 20 gifted and talented women from two different parties, different zip codes to fill this room," Sen. Barbara Mikulksi, D-Md., said while surrounded by the group of women senators. "In all of American history only 16 women had served. Now there are 20 of us."

Senator-elect Deb Fischer, R-Neb., becomes today the first women to be elected as a senator in Nebraska.

"It was an historic election," Fischer said, "But what was really fun about it were the number of mothers and fathers who brought their daughters up to me during the campaign and said, "Can we get a picture? Can we get a picture?' Because people realize it and -- things do change, things do change."

Tammy Baldwin Becomes First Openly Gay Senator Watch Video

Elizabeth Warren Wins Massachusetts Senate Race Watch Video

The women senators all agree that women will be getting things done in this new Congress, a sign of optimism felt for the new Congress, after the bruising battles of the 112th Congress.

"We're in force and we're in leadership positions, but it's not just the position that we hold. I can tell you this is a can-do crowd," Mikulski said of both Democrats and Republican senators in the room. "We are today ready to be a force in American politics."

And while the number of women in the Senate today makes historic, many of the women agreed that they want to keep fighting to boost those numbers. Sen. Barbara Boxer, D-Calif., said that women are still "underrepresented" in the Senate.

"I think that until we get to 50, we still have to fight because it's still a problem," Boxer said. "I think this class as you look around, Republicans and Democrats... I think that because of this new class and the caliber of the people coming and the quality of the people coming, I think that hopefully in my lifetime -- and I really do hope and pray this is the case -- we will see 50 percent. "

No Sorority Here, Even With the Will to Work Together

The cooperation does not make them a "sorority," Sen. Dianne Feinstein, D-Calif., says. There are real differences in ideology and personality and they don't want their gender to define them as senators.

But the women also admit that they believe having more women in the room would help in fierce negotiations, compromise, and legislating on Capitol Hill, traits they say do not come as naturally to their male colleagues in the Senate. That sentiment enjoys bipartisan support among the women of the Senate.

"What I find is with all due deference to our male colleagues, that women's styles tend to be more collaborative," Sen. Susan Collins, R-Maine, said.

Sen. Claire McCaskill, D-Mo., said by nature women are "less confrontational." Sen-elect Mazie Hirono, D-Hawaii, says that women are "problem solvers."

Sen. Amy Klobuchar, D-Minn., says that women have a camaraderie which helps in relationships that are key to negotiations on Capitol Hill, something she says comes natural to women more than men.

"I think there's just a lot of collaboration between the women senators and... advice and really standing up for each other that you don't always see with the men," she said.

Read More..

Time to rebrand in Lincoln's image?

Wade Henderson thinks the modern Republican Party should look to Abraham Lincoln for some inspiration.

STORY HIGHLIGHTS

• Wade Henderson: January 1 is 150th anniversary of the Emancipation Proclamation


• He says GOP should look to Lincoln, a canny politician who led moral fight on civil rights


• He says GOP has history of civil rights support that it has largely abandoned in recent years


• Henderson: In 2012, election minority voters unimpressed; GOP should return to roots

Editor's note: Wade Henderson is the president and CEO of The Leadership Conference on Civil and Human Rights and The Leadership Conference Education Fund.

(CNN) -- On January 1, the nation will commemorate the 150th anniversary of the Emancipation Proclamation, which legally freed slaves in the secessionist Southern states. Meanwhile, thousands of theaters will still be presenting the film "Lincoln," portraying the soon-to-be-martyred president's efforts in January 1865 to persuade the House of Representatives to pass the 13th Amendment, outlawing slavery throughout the nation.

Coming at a time when many Republicans are seeking to rebrand their party, these commemorations of the first Republican president raise this question: Why not refashion the Grand Old Party in the image of the Great Emancipator?

Steven Spielberg's historical drama, as well as the biography upon which it is based, Doris Kearns Goodwin's "Team of Rivals: The Political Genius of Abraham Lincoln," both remind today's Americans that Lincoln was not only a moral leader but also a practical politician. The political identity that Lincoln forged for the fledgling Republican Party -- uniting the nation while defending individual rights -- was a winning formula for half a century, with the GOP winning 11 of 13 presidential elections from 1860 through 1908.

Wade Henderson

Moreover, support for civil rights persisted in the party throughout the last century. Among the Republican presidents of the 20th century, Theodore Roosevelt famously hosted Booker T. Washington at the White House. Dwight Eisenhower ordered federal troops to Little Rock, Arkansas, to enforce school desegregation. Richard Nixon expanded affirmative action. And George H. W. Bush signed the Americans with Disabilities Act into law.

Brazile: A turning point for freedom in America, 150 years later

In the U.S. Senate, such prominent Republicans as Edward Brooke of Massachusetts (the first African-American senator since Reconstruction), Jacob Javits of New York and Everett Dirksen of Illinois were strong supporters of civil rights, as were governors such as Nelson Rockefeller in New York, George Romney in Massachusetts and William Scranton in Pennsylvania.

Former California Gov. Earl Warren served as chief justice when the Supreme Court issued its decision in Brown v. Board of Education, ordering the desegregation of the nation's schools. As recently as 1996, the Republican national ticket consisted of two strong civil rights advocates, former Kansas Sen. Bob Dole and former New York Rep. Jack Kemp.

Unfortunately, by 2012, the Republican Party had veered far from its heritage as the party of Lincoln. Prominent Republicans supported statewide voter suppression laws that hit hardest at vulnerable minorities or called for the "self-deportation" of immigrants and their families.

While some Republican senatorial nominees needlessly offended women, leading moderates such as Maine Sen. Olympia Snowe and Ohio Rep. Steven LaTourette opted for retirement. In what I hope was rock bottom, 38 Senate Republicans rebuffed their former presidential nominee Bob Dole -- a wheelchair-bound war hero -- to block an international civil and human rights treaty for people with disabilities.

Not surprisingly, the GOP in the presidential race lost the black vote by 87 points, the Asian-American vote by 47 points, the Latino vote by 44 points and the women's vote by 11 points, according to CNN exit polls. As Republicans reflect on their path forward with minority voters and persuadable whites, there are opportunities to advance civil rights.

While the GOP has increasingly promoted diverse candidates, it has not yet begun to reflect the values of our diverse nation. Fiscally conservative officeholders can fight for civil and human rights.

Just a few years ago, Alabama Sen. Jeff Sessions championed a reduction in the sentencing disparity between people charged with possession of crack and powder cocaine. These are two forms of the same drug, but crack cocaine is used more by minorities and carried much harsher punishments for possession. Working with Sessions, civil rights advocates pushed to reduce this disparity significantly -- among the greatest advances in criminal justice reform in decades.

Looking toward to the 113th Congress, several civil rights initiatives would fit conservative values. They need congressional champions. Conservative lobbyist Grover Norquist and conservative strategist Richard Viguerie have called for criminal justice reforms that would reduce the number of prisoners in U.S. prisons.

The U.S. Chamber of Commerce has joined the civil rights coalition's call for federal initiatives to narrow the educational achievement gap between minority and white students. And more Republicans are joining Jeb Bush's support for comprehensive immigration reform that provides a pathway to citizenship for long-term, law-abiding residents.

Most importantly, the GOP must embrace one of Lincoln's most enduring legacies, the 15th Amendment, which guaranteed the right to vote regardless of race. The GOP must stop trying to suppress voters and begin to champion electoral reform that shortens lines and helps more people to vote.

I don't expect another Abraham Lincoln or Frederick Douglass from the modern Republican Party -- I'll settle for a few more Jeff Sessions. When Republicans consider the consequences for their party's narrow appeal, they'll try to return to their roots.

I'm happy to help.

Follow @CNNOpinion on Twitter

Join us at Facebook/CNNOpinion

The opinions expressed in this commentary are solely those of Wade Henderson.

Read More..

US stocks soar on fiscal cliff deal

NEW YORK: US stocks shot up Wednesday on news of a fiscal cliff deal in Congress that prevented most tax increases and delayed sharp spending cuts.

Fifteen minutes into trade, the Dow Jones Industrial Average was up 215.17 points (1.64 percent) at 13,319.31.

The tech-rich Nasdaq Composite added 71.73 points (2.38 percent) at 3,091.24, while the broad-market S&P 500 gained 25.76 points (1.81 percent) at 1,451.95.

In the first trading day of the new year, Wall Street joined a global equities rally celebrating the passage of a bill that avoids the "fiscal cliff" of automatic spending cuts and tax increases.

While markets were closed on Tuesday for the New Year holiday, lawmakers approved a compromise bill that raises taxes on the rich and puts off automatic $109 billion federal budget cuts for two months.

If they had failed, Americans would have been hit by sweeping tax hikes, and spending cuts would have kicked in across the government, in a combined $500 billion shock that could have undermined the tepid recovery.

The Wall Street rally reflected a sense of relief that the tax deal should help keep the US economy from slipping back into recession, said Patrick O'Hare of Briefing.com.

"Still, it seemingly ignores the fact that the tax deal, which did not include an extension of the payroll tax cut, is going to be a drag on the economy."

- AFP/de

Read More..

Fiscal cliff crises averted, but more fights loom

STORY HIGHLIGHTS

• NEW: It's the first time since 1993 that tax rates rise for any Americans, according to Tax Foundation


• The vote prevents tax increases for more than 98% of Americans


• It also wards off $110 billion in automatic cuts to domestic and military spending


• Reid accused Boehner of "dictatorship" Friday; Boehner responded with profanity

(CNN) -- After exhaustive negotiations that strained the country's patience, the House approved a bill to avert the dreaded fiscal cliff, staving off widespread tax increases and deep spending cuts.

In the 257-167 vote late Tuesday, 172 Democrats and 85 Republicans favored the bill; 16 Democrats and 151 Republicans opposed it.

The approved plan maintains tax cuts for individuals earning less than $400,000 per year and couples earning less than $450,000. It will raise tax rates for those who make more -- marking the first time since 1993 that federal income tax rates have gone up for any Americans, according to the Tax Foundation.

The bill also extends unemployment insurance and delays for two months a series of automatic cuts in federal spending.

World markets rose after the news. U.S. stocks jumped, too, with the Dow rising 210 points after opening.

Just hours before the bill passed, House Speaker John Boehner pitched to fellow Republicans the idea of amending the Senate-approved bill to add a package of spending cuts. He cautioned about the risk in such a strategy, saying there was no guarantee the Senate would act on it.

Rum, electric vehicles and motor sports: Nuggets in the fiscal cliff bill

By the end of the night, he was among the Republicans who voted for the bill as written.

President Barack Obama said he would sign the bill into law, but he did not say when. After the vote, he flew to Hawaii to rejoin his wife and daughters on their winter vacation.

Congress is planning to send the bill to the White House by early afternoon, a Republican leadership aide told CNN.

In practical terms, there's no urgency on the president's signature. It's up to the Obama administration to implement the budget and tax changes, and since the president has said he will sign the measure, the administration can begin planning for the changes immediately.

Had the House not acted, and the Bush-era tax cuts expired fully, broad tax increases would have kicked in. In addition, $110 billion in automatic cuts to domestic and military spending would have taken place.

The combined effect could have dampened economic growth by 0.5%, possibly tipping the U.S. economy back into a recession and driving unemployment from its current 7.7% back over 9%, according to economists' estimates.

While the package provides some short-term certainty, it leaves a range of big issues unaddressed.

It doesn't mention the $16.4 trillion debt ceiling that the United States reached Monday.

It also puts off the so-called sequester, cuts in federal spending that would have taken effect Wednesday and reduced the budgets of most agencies and programs by 8% to 10%.

Come late February, Congress will have to tackle both those thorny issues.

Obama warned Congress that he will not tolerate another act of prolonged brinksmanship.

"While I will negotiate over many things, I will not have another debate with this Congress over whether or not they should pay the bills that they've already racked up through the laws that they've passed," he said after the Tuesday night vote.

"We can't not pay bills that we've already incurred. If Congress refuses to give the United States government the ability to pay these bills in time, the consequences for the entire global economy would be catastrophic -- far worse than the impact of the fiscal cliff."

How they voted: House | Senate

A partial victory

While the deal gives Obama bragging rights for raising taxes on the wealthiest Americans, it also leaves him breaking a promise.

Obama had vowed to raise tax rates for the top-earning 2% of Americans, including those with household income above $250,000 and individuals earning more than $200,000.

Raising the threshold for higher tax rates shrinks the number of Americans affected.

While nearly 2% of filers have adjusted gross incomes over $250,000, only 0.6% have incomes above $500,000, according to the Tax Policy Center.

Some House Republicans weren't exactly overjoyed in voting for the plan.

"I'm a very reluctant yes," said Rep. Nan Hayworth, an outgoing Republican representative from New York.

"This is the best we can do, given the Senate and the White House sentiment at this point in time, and it is at least a partial victory for the American people," she said. "I'll take that at this point."

Conservative lobbyist Grover Norquist, whose Americans for Tax Reform pushes candidates to sign a pledge never to raise taxes, said the plan preserves most of the Bush tax cuts and won't violate his group's beliefs.

"The Bush tax cuts lapsed at midnight last night," Norquist tweeted Tuesday. "Every (Republican) voting for Senate bill is cutting taxes and keeping his/her pledge."

The timing of the vote was crucial, as a new Congress is set to be sworn in Thursday. And without a breakthrough, the entire process would have had to start over.

Cliff deal spurs global market rally

Specifics of the plan

The legislation will raise roughly $600 billion in new revenues over 10 years, according to various estimates.

According to the deal:

-- The tax rate for individuals making more than $400,000 and couples making more than $450,000 will rise from the current 35% to the Clinton-era rate of 39.6%.

-- Itemized deductions will be capped for individuals making $250,000 and for married couples making $300,000.

-- Taxes on inherited estates will go up to 40% from 35%.

-- Unemployment insurance will be extended for a year for 2 million people.

-- The alternative minimum tax, a perennial issue, will be permanently adjusted for inflation.

-- Child care, tuition and research and development tax credits will be renewed.

-- The "Doc Fix" -- reimbursements for doctors who take Medicare patients -- will continue, but it won't be paid for out of the Obama administration's signature health care law.

The Democratic-led Senate overwhelmingly approved the bill early Tuesday before passing it to the House.

As news about the fiscal cliff's deflection spread across the world, several markets reacted positively Wednesday.

Australia's ASX All Ordinaries index added 1.2%. South Korea's KOSPI gained 1.5%, and the Hang Seng in Hong Kong advanced 1.9%. Tokyo's Nikkei and the Shanghai Composite remain closed for holiday celebrations but will reopen later in the week.

More fiscal cliffs loom

Payroll taxes still set to go up

Despite the last-minute fiscal cliff agreements, Americans are still likely to see their paychecks shrink somewhat because of a separate battle over payroll taxes.

The government temporarily lowered the payroll tax rate in 2011 from 6.2% to 4.2% to put more money in the pockets of Americans. That adjustment, which has cost about $120 billion each year, expired Monday.

Now, Americans earning $30,000 a year will take home $50 less per month. Those earning $113,700 will lose $189.50 a month.

With the latest battle round over, lawmakers will next set their sights on the other items on their docket of congressional squabbles over money: the debt ceiling and resolving the sequester.

Obama said he hopes leaders in Washington this year will focus on "seeing if we can put a package like this together with a little bit less drama, a little less brinksmanship (and) not scare the heck out of folks quite as much."

He thanked bipartisan House and Senate leaders for finally reaching a resolution Tuesday, but said Congress' work this year is just beginning.

"I hope that everybody now gets at least a day off I guess, or a few days off, so that people can refresh themselves, because we're going to have a lot of work to do in 2013."

Read more: 5 things to know about the fiscal cliff

Angry rhetoric flew

In the tense days leading up to the deal, heated words flew between some Democrats and Republicans.

On Friday, after Democratic Senate Majority Leader Harry Reid accused Boehner of holding a "dictatorship" in his chamber, the House speaker responded with a profanity.

"Go f— yourself," Boehner said to Reid, according to a source with knowledge of the exchange in a White House lobby.

Big issues still pending

CNN's Dana Bash, Rich Barbieri, Charles Riley, Dana Ford, Matt Smith, Jessica Yellin, Deirdre Walsh and Ted Barrett contributed to this report.

Read More..