What Happens If We Go Over the Fiscal Cliff?

America is swiftly approaching the fiscal cliff.

President Obama and congressional leaders have talked for weeks with varying degrees of frequency and success at compromising, and one precept resonates throughout the public statements of politicians and economists: the so-called "fiscal cliff" would be a very bad thing.

But what actually happens if Washington takes us over it?

As has been well documented, the "cliff" is not one thing, but a ball of expiring economic provisions that lead to automatic policy changes at year's end, loosely grouped under the catch phrase. They fall into two categories, taxes and spending.

Should we fall off the cliff, the tax code would change most dramatically with the expiration of the so-called "Bush tax cuts," which created new brackets and lowered tax rates for both middle-class and high earners. According to the Tax Policy Center at the Washington, D.C.-based Brookings Institution, the average American taxpayer would see a tax hike of $3,446, ABC's David Muir reported for "World News."

Where do the hikes fall, exactly? For many tax brackets, rates would jump by at least three percentage points. The middle class would see the worst of it, according to analysis from the Congressional Research Service, the nonpartisan research arm that studies policy changes at Congress's request.

Charles Dharapak/AP Photo|Bill O'Leary/The Washington Post via Getty Images

For high earners, married couples making more than $222,300 but less than $397,000, rates would jump from 33 percent to 36 percent. For the highest earners, couples making over $397,000, taxes would rise from 35 percent to 39.6 percent.

But they'd rise for almost everyone else, too. Couples making $145,900 - $222,300 would see a rate jump from 28 percent to 31 percent. Couples making $72,300 - $145,900 would see rates jump from 25 percent to 28 percent.

The middle class would take the biggest hit: Married couples earning $60,350 - $72,300 would see tax rates jump from 15 percent to 28 percent. That means that without any credits or deductions, a couple making $65,000 would go from taking home $55,250 to taking home $46,800 next year if Congress and the president fail to strike a deal.

The cliff's tax implications go beyond the simple income-tax rate: The Alternative Minimum Tax (AMT) and the estate tax are also on the table with year-end deadlines.

The AMT is a tax that prevents high earners from escaping income-tax liability by claiming too many deductions. Taxpayers over a certain income add back certain deductions to see if they must pay a minimum rate. Ever since Bush's tax cuts, Congress has repeatedly extended an "AMT patch" to maintain the income threshold. According to the Congressional Research Service, if Congress doesn't act again this year, that threshold will drop from $74,450 to $45,000 for married couples and from $48,450 to $33,750 for individuals, exposing more people to the alternative minimum.

The estate tax, demonized by Republicans as the dreaded "death tax," would change significantly. Right now, estates of over $5.12 million are taxed at a maximum of 35 percent. If Congress doesn't act, next year estates of over $1 million will be taxed at 55 percent.

No one likes paying taxes, but the spending side of the cliff isn't supposed to be all that fun, either.

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From partisan perspective, ‘cliff’ may not be that scary

To many Americans, what’s going on in Washington looks like a circus show that isn’t the least bit entertaining — the nation’s leaders seemingly unable to come up with a deal that keeps most people from paying higher taxes.

But there is a logic to it. For all the posturing of the last few weeks, both sides see a measure of political upside in going over the “fiscal cliff” — or, at the least, an advantage in waiting until the last minute, since they want to avoid drawing the ire of their most loyal supporters by appearing to cave too quickly.

“This is a town where each side seems to see a political advantage to their position when nothing is happening,” said Sen. Ben Nelson (D-Neb.), who will retire Thursday and cautioned his colleagues against leaving the tricky negotiations for newcomers who will take office in a few days. “There’s enough blame to go around.”

Late Sunday, Vice President Joe Biden and Senate Minority Leader Mitch McConnell (R-Ky.) were engaged in high-stakes, last-minute talks on a deal that would avert the most significant economic effects of the fiscal cliff. There remained hope on Capitol Hill that a breakthrough could lead to votes in the House and Senate on Monday, ahead of a midnight deadline.

Lawmakers said they were deeply frustrated — even disgusted — by the spectacle of the lurching talks. But they said they have become resigned to last-second dealmaking in a divided Congress.

“It’s under the crucible of a time constraint that this place acts,” Rep. Scott Rigell (R-Va.) said.

For both parties, there are some logical incentives to go over the cliff.

Democrats are fresh off electoral victory in November and fighting a reputation that they too easily give ground. The way they see it, they’ll get what they want no matter what. Either they get a deal that includes tax increases on the wealthy or they go over the cliff. At that point, taxes would go up for everyone, and the Democrats would immediately move to cut rates for all but the wealthy.

They may, in fact, get more of what they want by waiting. As of late Sunday, for instance, Democrats appeared willing to agree to raise rates only for those making more than $400,000. But if they go over the cliff, Democrats would have less need to negotiate and could seek to set that number at $250,000, their original goal.

Sen. Patty Murray (D-Wash.) on Sunday reiterated a view she has pressed repeatedly with her Democratic colleagues: Going over the cliff is better than agreeing to a bad bargain. “We can’t accept a bad deal just because we’re here,” she said. “We have to keep working to get a good deal.”

Deal or no deal, the longer the current dynamic lasts, the longer Democrats will seek to portray Republicans as beholden to the rich at the expense of the middle class.

“They say that their biggest priority is making sure that we deal with the deficit in a serious way, but the way they’re behaving is that their only priority is making sure that tax breaks for the wealthiest Americans are protected,” President Obama said Sunday on NBC’s “Meet the Press.” “That seems to be their only overriding, unifying theme.”

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Nine dead after bus careens into Oregon ravine

LOS ANGELES: A Canada-bound bus crashed through a guard rail on an icy road in Oregon on Sunday and careened into a ravine, killing at least nine people and injuring at least 18 others, state police said.

The bus fell a couple hundred feet before stopping, Oregon State Police said on its website, adding that the chartered bus was reportedly heading home to Vancouver, Canada from Las Vegas, Nevada.

Police in the northwestern state are still investigating the cause of the crash, which occurred in the morning near the city of Pendleton, in northeastern Oregon.

The rescue effort was complicated by the drop-off from the highway, and police said "personnel trained for rope rescues" were called in to help.

About 40 passengers appeared to have been onboard the bus, but the numbers have not yet been confirmed.

The names and nationalities of the victims and other passengers were not immediately released, but many "are believed to be out of country residents," according to police.

Although the bus driver survived the crash, investigators have not been able to interview him due to the severity of the injuries.

There was at least one other fatal crash in northeastern Oregon early Sunday due to snowy and icy conditions, police said, urging all drivers to take precautions while traveling.

-AFP/ac

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Castrate all rapists, says Zubin Mehta

BEIJING: World famous composer of Indian origin, Zubin Mehta, called for castration of all accused in the Delhi gang-rape case and others found committing the rape in India. He expressed excitement about the protests against the gang-rape of Nirbhaya and expects positive changes to come out of it.

"I am fuming, but I see a very healthy sign of public objection, public demonstration. I hope it will not die down. I hope it will not be short-lived," Mehta told Toi in an exclusive interview.

He said the Indian government should realize what the people really want from it. "It is not only about justice, but the future of India. Police has to take it seriously".

Mehta said the issue is being discussed the world over like the case of Malala, the Pakistani girl, and brought shame to Indians. He also questioned the government's decision to shift the rape victim for medical treatment to Singapore. "Where they trying to remove her from the locality, for her own safety?" he asked.

The least that should be done is to castrate all the four accused in the Delhi gang rape case, he said. "I heard that a girl who reported rape was advised to marry one of the criminals. How can a human being do such a thing?" he asked.

"An important issue that needs to be addressed is how to look after the poor ladies who have been attacked," he said.

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How to Banish That New Year's Eve Hangover

For those of us who enjoy the occasional cocktail, the holiday season would be incomplete without certain treats of the liquid variety. Some look forward to the creamy charms of rum-laced eggnog; others anticipate cupfuls of high-octane punch or mugs of warm, spiced wine.

No matter what's in your glass, raising one as the year winds down is tradition. What could be more festive? The problem is, one drink leads to two, then the party gets going and a third is generously poured. Soon, the music fades and the morning arrives—and with it, the dreaded hangover. (Explore a human-body interactive.)

Whether it's a pounding headache, a queasy stomach, sweating, or just general misery, the damage has been done. So now it's time to remedy the situation. What's the quickest way to banish the pain? It depends who you ask.

Doctors typically recommend water for hydration and ibuprofen to reduce inflammation. Taking B vitamins is also good, according to anesthesiologist Jason Burke, because they help the body metabolize alcohol and produce energy.

Burke should know a thing or two about veisalgia, the medical term for hangover. At his Las Vegas clinic Hangover Heaven, Burke treats thousands of people suffering from the effects of drinking to excess with hydrating fluids and medications approved by the U.S. Food and Drug Administration.

"No two hangovers are the same," he said, adding that the unfavorable condition costs society billions of dollars-mostly from lost productivity and people taking sick days from work.

Hot Peppers for Hangovers?

So what's the advice from the nonmedical community? Suggestions range from greasy breakfasts to vanilla milkshakes to spending time in a steamy sauna. A friend insists hot peppers are the only way to combat a hangover's wrath. Another swears by the palliative effects of a bloody mary. In fact, many people just have another drink, following the old "hair of the dog that bit you" strategy.

Whether such "cures" actually get rid of a hangover is debatable, but one thing's for sure: the sorry state is universal. The only people immune to hangovers are the ones who avoid alcohol altogether.

So for those who do indulge, even if it's just once in awhile, see our interactive featuring cures from around the world (also above). As New Year's Eve looms with its attendant excuse to imbibe, perhaps it would be wise to stock your refrigerator with one of these antidotes. Pickled herring, anyone?

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Hillary Clinton Hospitalized With Blood Clot

Dec 30, 2012 8:11pm

(MICHAL CIZEK/AFP/Getty Images)

Secretary Hillary Clinton was hospitalized today after a doctors doing a follow-up exam discovered a blood clot had formed, stemming from the concussion she sustained several weeks ago.

She is being treated with anti-coagulants and is at NewYork-Presbyterian Hospital so that they can monitor the medication over the next 48 hours, Deputy Assistant Secretary Philippe Reines said.

Her doctors will continue to assess her condition, including other issues associated with her concussion. They will determine if any further action is required, Reines said.

Clinton, 65, originally fell ill from a stomach virus following a whirlwind trip to Europe at the beginning of the month, which caused such severe dehydration that she fainted and fell at home, suffering a concussion. No ambulance was called and she was not hospitalized, according to a state department official.

The stomach virus had caused Clinton to cancel a planned trip to North Africa and the United Arab Emirates, and also her scheduled testimony before Congress at hearings on the attack on the U.S. consulate in Benghazi, Libya.

According to a U.S. official, the secretary had two teams of doctors, including specialists, examine her after the fall.  They also ran tests to rule out more serious ailments beyond the virus and the concussion. During the course of the week after her concussion, Clinton was on an IV drip and being monitored by a nurse, while also recovering from the pain caused by the fall.

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Agreement within reach on ‘fiscal cliff’ deal, officials say

President Obama and Senate leaders were on the verge of an agreement Friday that would let taxes rise on the wealthiest households while protecting the vast majority of Americans from historic tax hikes set to hit in January.

The development marked a breakthrough after weeks of paralysis. After meeting with Obama at the White House, Senate Majority Leader Harry M. Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) said they would work through the weekend in hopes of drafting a “fiscal cliff” package they could present to their colleagues on Sunday afternoon.

As the Senate began haggling over critical details, the emerging deal faced an uncertain fate in the House, where Speaker John A. Boehner (R-Ohio) failed just one week ago to persuade his adamantly anti-tax caucus to let taxes rise even for millionaires.

Still, on Friday, Obama pronounced himself “modestly optimistic” at a brief news conference at the White House. The ordinarily dour McConnell said he was “hopeful and optimistic.” And Reid immediately began preparing Senate Democrats for what could be a difficult vote.

“Whatever we come up with is going to be imperfect. Some people aren’t going to like it. Some people will like it less,” Reid said on the Senate floor before dozens of silent and attentive senators from both parties. But “we’re going to do the best we can for . . . the country that’s waiting for us to make a decision.”

According to people briefed on the talks, the developing package would protect nearly 30 million taxpayers from paying the alternative minimum tax for the first time and keep unemployment benefits flowing to 2 million people who otherwise would be cut off in January.

The deal also would likely halt a steep cut in Medicare reimbursements set to hit doctors in January and preserve popular tax breaks for both businesses and individuals, such as those for research and college tuition.

But the two sides were still at odds over a crucial issue: how to define the wealthy. Obama has proposed letting tax rates rise on income over $250,000 a year. Senate Republicans have in recent days expressed interest in a compromise that would lift that threshold to $400,000 a year, an offer Obama made to Boehner before the speaker abruptly broke off negotiations last week.

In addition to its political appeal, the $400,000 threshold has practical benefits, Republican aides said: It would limit tax increases to the very top tax bracket rather than the top two brackets. And it would avoid a quirk of the tax code that would cause rates to rise more dramatically for those earning between $250,000 and $400,000 than for households with much larger incomes.

The two sides also had yet to agree on another politically sensitive issue: how to tax inherited estates. Republicans — and many Senate Democrats from states with large family farms — want to maintain the current tax structure, which exempts estates worth up to $5 million and taxes those above that level at 35 percent. Obama has proposed a $3.5 million exemption and a tax rate of 45 percent, a proposal that is far more acceptable to liberal Democrats.

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Old rites for New Year

PARIS: As the clock strikes 12 on Monday, millions will pop champagne corks and light fireworks while others indulge in quirkier New Year's rituals like melting lead, leaping off chairs or gobbling grapes.

One of the world's oldest shared traditions, New Year's celebrations take many forms, but most cultures have one thing in common -- letting one's hair down after a long, hard year.

For much of the globe this involves sipping bubbly with friends until the sun comes up, seeing out the old year with bonfires and flares and off-key renditions of Auld Lang Syne.

But others have rather more curious habits, often steeped in superstition.

In Finland, say tour guides, people pour molten lead into cold water to divine the year ahead from the shape the metal sets in. If the blob represents a ship it is said to foretell travel, if it's a ball, good luck.

In Denmark, people stand on chairs and jump off in unison as the clock strikes midnight, literally leaping into the new year.

The Danes also throw plates at their friends' homes during the night -- the more shards you find outside your door in the morning the more popular you are said to be.

The Dutch build massive bonfires with their Christmas trees and eat sugary donuts -- one of many cultures to consume round New Year's foods traditionally believed to represent good fortune.

Spaniards, in turn, gobble a dozen grapes before the stroke of midnight, each fruit representing a month that will either be sweet or sour.

In the Philippines, revellers wear polka dots for good luck, while in some countries of South America people don brightly coloured underwear to attract fortune -- red for love and yellow for financial success.

Despite regional and cultural differences, for most the New Year's festivities are a chance to let off steam before the annual cycle starts all over again.

"This is a holiday that is about relaxation and letting go," explained George Washington University sociologist Amitai Etzioni.

"The whole year people are chained by social requirements, morals, laws... "And then there comes some occasion in which society says for today, 24 hours, for this evening, all bets are off, all norms are suspended, and it's OK.

"The next day we have to get back in line."

Historians say people have been marking the year change for thousands of years.

The ancient Romans, who gave us the solar calendar, celebrated in a way similar to ours.

Playing, eating, drinking

"It was a day of public celebration. People spent the day playing, eating and drinking," according to French historian John Scheid of the College de France.

"During the period of the empire, the first four centuries AD, this originally Roman custom became a general festival in the whole Roman world, and so it remained until today."

January 1 became the day widely marked as New Year's Day only in 46 BC, when the emperor Julius Caesar introduced a new calendar. March 1 had been the first day of the year until then.

Medieval Europe, though, continued celebrating New Year's Day on dates with religious significance, including Christmas.

In 1582, Pope Gregory XIII replaced the Julian calendar with the Gregorian one, correcting mathematical inconsistencies.

Most Catholic countries immediately adopted the calendar and its January 1 start, but Protestant nations did so only gradually.

Britain and its then-colonies, including the United States, were among the last to introduce the new calendar, from 1752.

While most of the world has now adopted January 1 as the official start of the year, some still hold their festivities on other dates.

Orthodox churches celebrate on January 14 (January 1 on the Julian calendar), while the Chinese New Year can fall on any date between January 21 and February 20, depending on the position of the moon.

Next year, it will be February 10.

- AFP/ck

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Short-tenure appointments to top security posts raise eyebrows

NEW DELHI: A flurry of senior postings in paramilitary, intelligence and home ministry have raised more than a few eyebrows as appointments to key jobs fail to keep in view the need to provide incumbents at least a year in their assignments.

The shift of Ajay Chadha, who was special secretary (internal security) in the home ministry, as Indo-Tibetan Border Police chief seems puzzling as he was holding an important assignment in North Block and will retire by August next year.

If shifting Chadha -- a well regarded officer who has served in Delhi Police -- is surprising, the move to replace him with an officer who will have a short tenure is also causing some comment although the decision is yet to be finalized.

In the meantime, Subhash Joshi, who was serving as director general of National Security Guard, has moved to Border Security Force where he will remain till February 2014. Arvind Rajan, who takes charge of NSG, is also slated for a short stint.

Joshi headed NSG for a little more than six months while before him, Rajan Medhekar was in charge for nearly 20 months.

The postings seem to reinforce the impression of a degree of ad-hocism in dealing with important security-related assignments with some officers arguing that the Manmohan Singh government has lacked a serious engagement with policing and intelligence.

The nature of appointments to intelligence arms like IB and RAW in recent years have not resulted in the strategic upgrade in capacities and analysis that a major terror event like 26/11 should have resulted in. When West Bengal governor M K Narayanan was national security advisor, he took a keen interest in police appointments although he was also not seen to have built systems although he was a hands-on spook.

Chadha has moved to BSF but continues to hold effective charge of special secretary (internal security). His move to the paramilitary outfit was necessitated by Ranjit Sinha being appointed chief of the Central Bureau of Investigation.

Sinha's appointment has already drawn some controversy with Delhi Police commissioner Neeraj Kumar objecting to being excluded from the shortlist and BJP leaders Arun Jaitley and Sushma Swaraj asking the appointment to be stayed till a collegium is set up.

The appointment of Asif Ibrahim as Intelligence Bureau chief saw the claims of Yashovardhan Azad and S Jayaraman being overlooked. The latter is now seen in the running for special secretary (internal security). Some feel that the appointment of Ibrahim's predecessor Nehchal Sandhu as deputy national security advisor could mean his continued say in IB matters as he is unlikely to have a foreign policy role.

The other intelligence appointment saw Alok Joshi being named head of the Research and Analysis Wing. His tenure follows that of Sanjeev Tripathi who is seen to have enjoyed an unremarkable tenure as RAW head.

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How to Banish That New Year's Eve Hangover

For those of us who enjoy the occasional cocktail, the holiday season would be incomplete without certain treats of the liquid variety. Some look forward to the creamy charms of rum-laced eggnog; others anticipate cupfuls of high-octane punch or mugs of warm, spiced wine.

No matter what's in your glass, raising one as the year winds down is tradition. What could be more festive? The problem is, one drink leads to two, then the party gets going and a third is generously poured. Soon, the music fades and the morning arrives—and with it, the dreaded hangover. (Explore a human-body interactive.)

Whether it's a pounding headache, a queasy stomach, sweating, or just general misery, the damage has been done. So now it's time to remedy the situation. What's the quickest way to banish the pain? It depends who you ask.

Doctors typically recommend water for hydration and ibuprofen to reduce inflammation. Taking B vitamins is also good, according to anesthesiologist Jason Burke, because they help the body metabolize alcohol and produce energy.

Burke should know a thing or two about veisalgia, the medical term for hangover. At his Las Vegas clinic Hangover Heaven, Burke treats thousands of people suffering from the effects of drinking to excess with hydrating fluids and medications approved by the U.S. Food and Drug Administration.

"No two hangovers are the same," he said, adding that the unfavorable condition costs society billions of dollars-mostly from lost productivity and people taking sick days from work.

Hot Peppers for Hangovers?

So what's the advice from the nonmedical community? Suggestions range from greasy breakfasts to vanilla milkshakes to spending time in a steamy sauna. A friend insists hot peppers are the only way to combat a hangover's wrath. Another swears by the palliative effects of a bloody mary. In fact, many people just have another drink, following the old "hair of the dog that bit you" strategy.

Whether such "cures" actually get rid of a hangover is debatable, but one thing's for sure: the sorry state is universal. The only people immune to hangovers are the ones who avoid alcohol altogether.

So for those who do indulge, even if it's just once in awhile, see our interactive featuring cures from around the world (also above). As New Year's Eve looms with its attendant excuse to imbibe, perhaps it would be wise to stock your refrigerator with one of these antidotes. Pickled herring, anyone?

Read More..