NEWS,01.01.2013

'Fiscal cliff' plan goes to Republican House

A legislative fix to patch up America's fiscal crisis will be taken up by lawmakers in the Republican-controlled House of Representatives on Tuesday after passing the Senate overnight.The White House and top Republicans struck a deal after dramatic 11th-hour negotiations to avert huge New Year tax hikes and postpone automatic spending cuts that had threatened to send the US economy back into recession.If the legislation passes the House as expected, it will represent a win for President Barack Obama as it raises taxes on the richest Americans albeit above an income threshold higher than he and other Democrats had wanted.But the victory will be hollow as it fails to tackle the deep spending cuts needed to resolve America's austerity crisis, setting up the prospect of another bitter Washington battle at the start of Obama's second term.After months of agonising over the crisis, weeks of debate about a possible solution, and days of intense, closed-door bartering, the US Senate voted overwhelmingly 89-8 early Tuesday to pass a controversial bill that averts the so-called "fiscal cliff".Hiked tax ratesAlthough the midnight deadline was technically missed, any serious impact on the world's biggest economy will be avoided as long as legislation passes the House of Representatives in the coming days.Obama issued a statement shortly after the 02:00 (07:00 GMT) Senate vote, urging lawmakers in the Republican-controlled House to "pass it without delay." A vote could come as early as Tuesday.If the measure is agreed by both chambers of Congress, tax rates will be hiked on households earning over $450 000 a year but remain where they are for everyone else.While not matching Obama's campaign threshold of $250 000, it would represent a major concession from Republicans who have stuck solidly to a pledge of no higher taxes since then president George HW Bush failed to win re-election in 1992 after breaking a promise not to raise rates"While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay," Obama said in his statement.he deal puts off $109bn in budget cuts across the government for two months, setting the stage for a new showdown between Obama's Democrats and Republicans in dysfunctional Washington at the end of February, just weeks after the president is sworn in for his second term.Winning over RepublicansHad no deal been struck, experts warned that the fragile US economy could have been sent spinning back into recession due to the $500bn combined whack of spending cuts and tax hikes.It remains for Republican House Speaker John Boehner to rally his restive conservative coalition around the pact, which will likely need some Democratic votes in the House to pass.For two decades, Republicans have fought any attempt to raise taxes. So White House officials will see vindication in a deal that enshrines one of Obama's top pledges in his re-election campaign.In a terse statement, Boehner said his chamber would pick up the legislation if it passed the Senate."Decisions about whether the House will seek to accept or promptly amend the measure will not be made until House members and the American people have been able to review the legislation," he said.‘Deal better than the alternative’Democrats suggested that the deal, like many congressional bargains, was not perfect, but that it was preferable to the alternative."It's not that this proposal is regarded as great or is loved in any way. But it's a lot better than going over the cliff," Senator Chuck Schumer told reportersWorld stock markets, expected to be thrown into turmoil by a failure to beat the deadline, are closed New Year's Day, so lawmakers have a few extra hours of breathing room to get the deal concluded.The legislation will also extend tax credits for clean energy firms and unemployment insurance for two million people that had been due to expire.And it includes an end to a temporary two percent cut to payroll taxes for Social Security retirement savings - meaning all Americans will pay a little more - and changes to inheritance and investment taxes.Relief seemed to course through the Senate during and after the vote, but both sides were already gearing up for the next legislative showdown, over the need to lift the government's statutory borrowing limit of $16.4trillion, reached on Monday.The Treasury will take extraordinary measures to keep the government afloat for an undisclosed period of time until the ceiling is raised. Republicans are already demanding spending cuts in return.That fight will now be doubled as it is likely to coincide with the new deadline for the two-month sequester postponement set up by the fiscal cliff agreement.

Activists release anti-North Korea leaflets

South Korean activists launched balloons carrying anti-Pyongyang leaflets across the border on Tuesday as North Korea joined a global party by greeting the New Year with fireworks.About 30 activists released seven balloons carrying 28 000 leaflets in the northern border town of Gwanjeonri in Cheorwon County, shouting "Down with North Korea's dynastic dictatorship!"The launch sparked scuffles with ten local residents who voiced fear of North Korean reprisals, but there were no injuries thanks to quick intervention by police.The launch went ahead despite repeated threats from Pyongyang of military strikes against such exercises.The leaflets launched on Tuesday urged North Koreans to rise up against their new leader Kim Jong-Un and included pictures of overthrown strongmen like Iraq's Saddam Hussein and Libya's Muammar Gaddafi.Kim, in his late 20s, came to power after his father and long-time leader Kim Jong-Il died in December 2011.In Pyongyang, the new leader started the New Year by watching a musical performance and fireworks, according to the official Korean Central News Agency."Fireworks were displayed to beautifully decorate the nocturnal sky above Pyongyang and bells rang on the New Year," it said.

Venezuelans pray as Chavez health worsens

Backers of Venezuelan President Hugo Chavez prayed and called off New Year's Eve festivities on Monday as the cancer-stricken leftist leader took a turn for the worse, fuelling doubts about his political future.Venezuelans prayed in church and a downtown square after the government announced that Chavez suffered "new complications" from a respiratory infection following his fourth cancer-related surgery on 11 December in Cuba.His vice president and political heir, Nicolas Maduro, broke the news from Havana on Sunday night, saying the condition of the 58-year-old leader was delicate and that he faced an uphill battle.Maduro decided to stay in Cuba for "the next few hours" to check on the ubiquitous "Comandante," the face of the Latin American left and fierce critic of the United States who has led the oil-rich nation for 14 years.RumoursJorge Arreaza, Venezuela's science and technology minister as well as the president's son in law, took to Twitter to try to tamp down rampant social media speculation that the end might be near, or had already come."My fellow countrymen: do not believe ill-intentioned rumours. President Chavez has spent the day calmly and stable, with his children at his side," said Arreaza who is in Cuba with other family members.Back in Caracas, crews took down the stage of a downtown concert site while Information Minister Ernesto Villegas invited Venezuelans to gather at Plaza Bolivar to "pray with joy and optimism" for Chavez."I deeply love him and would give my life for him. There should be millions like Chavez," Haydee Dominguez, a 50-year-old secretary, said at the gathering led by Villegas.Others teared up at the San Francisco church while several ministers attended a special mass for Chavez at the Miraflores presidential palace at midday.At a meeting point for Chavez followers in Plaza Bolivar, "Chavistas" choked up as they contemplated the health of their leader."We are all praying for the health of our comandante," said Miriam, one of the people gathered at the square. "There can't be any party here."Election Chavez had declared himself cancer free in July, more than a year after being diagnosed with the disease in the pelvic region. The exact nature of the cancer has never been made public.He was re-elected in October but announced a relapse earlier this month and rushed to Cuba for another operation.On Monday on Twitter, hashtags translating into expressions such as "Chavez will live and conquer" and "I love Chavez" were numerous, while others speculated about his health.One of the people discussing Chavez's health was Jose Rafael Marquina, a Venezuelan doctor who lives in the United States and has claimed in the past to have reliable sources informing him about the president."The respiratory failure continues without any improvement and the kidney function continues to deteriorate," he wrote on Twitter.The government has denied such rumours.OppositionChavez is scheduled to be sworn in on January 10 but the government has indicated that the ceremony could be postponed if the president is not fit by then.Opposition leader Henrique Capriles, who lost to Chavez in the 7 October election, predicted on Monday that there would be "big changes" in 2013.The opposition coalition, Democratic Unity Table, called for dialogue with the government to deal with what it called an "emergency".Veppex, a Miami-based association of 25 000 Venezuelans living outside their country as refugees or political exiles, insisted the constitution must be respected verbatim and new elections held if Chavez is indisposed.Under Venezuela's constitution, a presidential election must be held within 30 days if the head of state is incapacitated or dies before his inauguration or within the first four years of his term.Swearing inThe government is trying to work out how to "resolve that obstacle", said Luis Vicente Leon, head of pollsters Datanalisis, who said it was clear now that Chavez was in a critical condition.As the constitution says he must be sworn in on 10 January, "anything else will be hard to sell without it being construed as an institutional coup", Leon said.But Maduro and parliament speaker Diosdado Cabello have left the door open for Chavez to be sworn in at a later date by the Supreme Court.Cabello has even said that new elections will not be convened on 10 Januar, nor will he himself take over temporarily, as the constitution stipulates, if Chavez is out of the picture.