NBC’s Engel, TV crew escape abduction in Syria

BEIRUT (AP) — NBC‘s chief foreign correspondent Richard Engel said Tuesday he and members of his network crew escaped unharmed after five days of captivity in Syria, where more than a dozen pro-regime gunmen dragged them from their car, killed one of their rebel escorts and subjected them to mock executions.

Appearing on NBC’s “Today” show, an unshaven Engel said he and his team escaped during a firefight Monday night between their captors and rebels at a checkpoint. They crossed into Turkey on Tuesday.

NBC did not say how many people were kidnapped with Engel, although two other men, producer Ghazi Balkiz and photographer John Kooistra, appeared with him on the “Today” show. It was not confirmed whether everyone was accounted for.

Engel said he believes the kidnappers were a Shiite militia group loyal to the Syrian government, which has lost control over swaths of the country’s north and is increasingly on the defensive in a civil war that has killed 40,000 people since March 2011.

“They kept us blindfolded, bound,” said the 39-year-old Engel, who speaks and reads Arabic. “We weren’t physically beaten or tortured. A lot of psychological torture, threats of being killed. They made us choose which one of us would be shot first and when we refused, there were mock shootings,” he added.

“They were talking openly about their loyalty to the government,” Engel said. He said the captors were trained by the Iranian Revolutionary Guard and allied with Hezbollah, the Lebanese Shiite militant group, but he did not elaborate.

There was no mention of the kidnapping by Syria’s state-run news agency.

Both Iran and Hezbollah are close allies of the embattled Syrian government of President Bashar Assad, who used military force to crush mostly peaceful protests against his regime. The crackdown on protests led many in Syria to take up arms against the government, and the conflict has become a civil war.

Engel said he was told the kidnappers wanted to exchange him and his crew for four Iranian and two Lebanese prisoners being held by the rebels.

“They captured us in order to carry out this exchange,” he said.

Engel and his crew entered Syria on Thursday and were driving through what they thought was rebel-controlled territory when “a group of gunmen just literally jumped out of the trees and bushes on the side of the road.”

“There were probably 15 gunmen. They were wearing ski masks. They were heavily armed. They dragged us out of the car,” he said.

He said the gunmen shot and killed at least one of their rebel escorts on the spot and took the hostages into a waiting truck nearby.

Around 11 p.m. Monday, Engel said he and the others were being moved to another location in northern Idlib province.

“And as we were moving along the road, the kidnappers came across a rebel checkpoint, something they hadn’t expected. We were in the back of what you would think of as a minivan,” he said. “The kidnappers saw this checkpoint and started a gunfight with it. Two of the kidnappers were killed. We climbed out of the vehicle and the rebels took us. We spent the night with them.”

Engel and his crew crossed back into neighboring Turkey on Tuesday.

The network said there was no claim of responsibility, no contact with the captors and no request for ransom during the time the crew was missing.

NBC sought to keep the disappearance of Engel and the crew secret for several days while it investigated what happened to them. Major media organizations, including The Associated Press, adhered to a request from the network to refrain from reporting on the issue out of concern it could make the dangers to the captives worse. News of the disappearance did begin to leak out in Turkish media and on some websites on Monday.

Syria has become a danger zone for reporters since the conflict began.

According to the Committee to Protect Journalists, Syria is by far the deadliest country for the press in 2012, with 28 journalists killed in combat or targeted for murder by government or opposition forces.

Among the journalists killed while covering Syria are award-winning French TV reporter Gilles Jacquier, photographer Remi Ochlik and Britain’s Sunday Times correspondent Marie Colvin. Also, Anthony Shadid, a correspondent for The New York Times, died after an apparent asthma attack while on assignment in Syria.

The Syrian government has barred most foreign media coverage of the civil war in Syria. Those journalists whom the regime has allowed in are tightly controlled in their movements by Information Ministry minders. Many foreign journalists sneak into Syria illegally with the help of smugglers and travel with rebel escorts or drivers.

Engel joined NBC in 2003 and was named chief foreign correspondent in 2008. He previously worked as a freelance journalist for ABC News, including during the U.S. invasion of Iraq. He has lived in the Middle East since graduating from Stanford University in 1996.

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Fate of massacre site can help healing

AURORA, Colo. (AP) — As Newtown, Conn., grieves the deadly mass shooting at Sandy Hook Elementary School, victims' families and residents will eventually have to decide what to do with the building and how to memorialize the fallen.

Will they decide to demolish the school where authorities say Adam Lanza killed 20 children and six adults before killing himself? Or just the parts where he opened fire? Will there be a memorial on school grounds, or in town? Or both?

Whatever they choose, it will give them a measure of control over a situation in which they have had very little, said Dr. Louis Kraus, chief of child and adolescent psychiatry at Rush University Medical Center in Chicago.

"To be able to have some control and say in that process I think is going to be very important" to the healing process, he said.

Here's a look at what communities that have faced deadly mass shootings have done:

— After a white supremacist opened fire in a Sikh temple in Oak Creek, Wis., in August, killing six people and injuring four, temple officials held a purifying ceremony and removed bloodstained carpeting, repaired shattered windows and painted over gunfire-scarred walls.

But they left one reminder of the violence — a dime-size bullet hole in the door jamb leading to the prayer room. The hole is now marked with a small gold plate engraved with "We Are One. 8-5-12."

"It frames the wound," Pardeep Kaleka, son of former temple president Satwant Singh Kaleka, who died in the massacre, said recently. "The wound of our community, the wound of our family, the wound of our society."

— After a gunman killed 12 people at a midnight showing of the Batman movie in Aurora, Colo., more than 70 percent of the 6,300 people who responded to an online survey wanted the theater reopened.

A memorial that sprang up near the theater is gone but a new sign offers sympathy to those suffering from the nation's latest mass shooting —"Newtown, CT We feel your pain."

— In Norway, extensive remodeling is planned on the small island of Utoya, where 69 people, more than half of them teenagers attending summer camp, were killed by a far-right gunman in 2011.

Utoya's main building, a cafeteria where 13 of the victims were shot to death, will be torn down and replaced by a cluster of new buildings surrounding a square, creating the feel of a "small village," project manager Joergen Frydnes said.

The idea is to bring back the positive atmosphere that characterized Utoya before the tragedy, he said. There was no summer camp this year and it's unclear when the left-wing youth group will be back at Utoya for what used to be its annual highlight.

Frydnes said it will happen, eventually.

— At Virginia Tech, the scene of the worst mass shooting in modern U.S. history, a classroom building where a student gunman killed 30 people in April 2007 is now home to the Center for Peace Studies and Violence Prevention.

A dormitory where the two other students were killed has been turned into a residential college. The gunman killed himself.

As at many other scenes of mass shootings, a memorial was created on the campus' main lawn recreating the 32 stones — one for each person killed — placed there in the hours after tragedy.

— In Pennsylvania, an Amish community quickly decided that removing a schoolhouse where five girls were killed and five others were wounded in October 2006 by a gunman would be the best way to help bring resolution, mainly out of sensitivity to their children.

Ten days after the shooting, heavy machinery moved in before dawn to demolish the West Nickel Mines Amish School, making the site indistinguishable from the surrounding pasture.

New Hope Amish School, its replacement with added security features, was built a few hundred yards away and opened April 2, 2007 — six months to the day after the massacre.

— After a man killed 16 children and a teacher at a primary school gymnasium in Dunblane, Scotland, before turning the gun on himself, authorities demolished the gym.

The site of the gym is now a small garden that includes a plaque with the names of all the victims, most of whom were aged 5. A new gym was built on the school grounds.

Two miles from the school, on the outskirts of the town, is a community center built after a vote on how to spend the money donated from well-wishers around the world.

On the night of the Newtown shooting, some people came to the center and lit candles, said Stewart Prodger, a trustee of the charity that runs the center.

— After two students went on a deadly rampage at Columbine High School in Littleton, Colo., in April 1999, students finished the year at another school. Columbine reopened in time for the following school year after extensive repairs.

"The intent of the school district is to put this back as a high school," Jack Swanzy, lead architect on the refurbishing project, said at the time. "We don't want to make it a shrine to the tragedy."

School district officials originally considered remodeling and reopening the second-floor library, where most of the students were killed, but parents objected and asked that it be demolished and replaced.

The district eventually agreed and the old library, which sat above the school cafeteria, was removed and the space converted into an atrium.

A memorial to those killed — 12 students and a teacher — opened years later on a hill above the school. The broad oval sunken into the rolling terrain still attracts people.

On Friday, after the Newtown shooting, Amber Essman, 24, made her first visit. She was in grade school at the time of the shooting and had been hesitant to visit before because of the emotions it would bring up.

She wanted to pay belated respects to those killed at Columbine and provide some comfort to their families. "They need comfort and peace today in addition to the families in Connecticut that have been affected," she said.

___

Associated Press writers Karl Ritter in Stockholm, Dinesh Ramde in Milwaukee, Michael Felberbaum in Richmond, Va., Mark Scolforo in Harrisburg, Pa., and Ben McConville in Edinburgh, Scotland, contributed to this report.

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Gabby Douglas, Adele among brightest young stars -Forbes magazine

NEW YORK (Reuters) – Fashion designer Carly Cushnie, actress Kate McKinnon and videogame creator Kim Swift may not be household names yet, but they are destined to do great things and will be tomorrow’s young stars, Forbes magazine said on Monday.

Along with Olympic Gold medalist gymnast Gabby Douglas, rapper Wiz Khalifa and researcher Josh Sommer, they have been chosen by the magazine for its “30 Under 30″ list of top achievers under 30 years old in their fields.

They are considered the top 30 achievers in 15 categories ranging from education, energy, music, science and healthcare to sports, technology games and apps and marketing.

“This is a celebration of youthful ambition and success. These are really amazing people and they are doing amazing things. It makes you very hopeful about the world,” Michael Noer, the executive editor of Forbes, said in an interview.

Many on the list, including singers Bruno Mars and Justin Bieber, as well as actresses Ashley and May Kate Olsen and fashion designer Alexander Wang, the newly appointed creative director at the French fashion house Balenciaga, are already well known.

Some are returnees to the list that was launched last year – like British singer and new mother Adele, the 24-year-old multiple Grammy Award winner, and American entrepreneur Kevin Systrom.

Noer said there has been a 60 percent turnover since 2011, so there are plenty of new faces on the list drawn up by Forbes staff and industry experts.

“I think there are a lot of interesting names on the list,” he said.

In energy, it is 28-year-old Leslie Dewan, a Massachusetts Institute of Technology graduate and co-founder and chief science officer of Transatomic Power.

“They are developing a new type of nuclear reactor that uses nuclear waste,” said Noer.

In music, Pittsburgh-bred Khalifa, 25, topped the list. Swift, the 29-year-old creative director at Airtight Games, was noted for creating hit videogame Portal.

“Kate McKinnon, the actress from ‘Saturday Night Live’ who just joined in April is our Hollywood selection. She is being hailed as the next Tina Fey,” Noer said.

Sommer, the executive director of the Chordoma Foundation which raises funds for research into chordoma, a rare, slow-growing bone cancer most commonly found in the spine, is another young achiever, according to Forbes.

Sommer created the foundation with his mother after being diagnosed with the disease while a student at Duke University in North Carolina.

“He was diagnosed with a rare type of bone cancer, dropped out of school to find a cure and he has made some progress,” said Noer.

The full list will be published in the January 21 issue of Forbes and can also be found at www.forbes.com/under 30 .

(Reporting by Patricia Reaney; editing by Paul Casciato and Mohammad Zargham)

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Bird flu kills 4-year-old boy in Indonesia

JAKARTA, Indonesia (AP) — A 4-year-old Indonesian boy has died from bird flu, bringing the death toll to 160 in the world’s hardest-hit country.

Health Ministry official Rita Kusriastuti said Tuesday that the boy died Dec. 6 in Tangerang city, just west of Jakarta, the capital. He developed symptoms of a cold and fever on Nov. 30 and was treated at a public health center before being hospitalized the same day he died.

Kusriastuti said the boy, from the West Java district of Bogor, was believed to have been infected with the H5N1 virus after having direct contact with dead fowl around his house.

Bird flu has killed at least 360 people worldwide since 2003. It remains hard for people to catch, but experts fear it could mutate into a more deadly form.

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What If Nothing or Nobody is to Blame for Adam Lanza? Guns, Video Games, Autism or Authorities

What if there is nobody or nothing to blame for Adam Lanza‘s heinous acts? Other than Lanza, of course.

What if school security and the school psychiatrist kept an eye on Lanza since his freshman year? The Wall Street Journal has a compelling narrative about the red flags addressed.

What if he had a form of autism that has little or no link to violent behavior? Lanza may have had Asperger’s syndrome but, even so, that is not a cause.

(RELATED: How To Make Sense of America’s Confusing Patchwork of Gun Control Laws)

What if it’s too simple to lay the massacre at the feet of the gun lobby? Reader Larry Kelly tweets that shaming Aspies “makes about as much sense at stigmatizing the NRA. Pick an enemy … any enemy. Let outrage and fear rule.”

What if Lanza wasn’t provoked by video games? David Axelrod, a close friend an adviser of President Obama, tweeted last night: “In NFL post-game: an ad for shoot ‘em up video game. All for curbing weapons of war. But shouldn’t we also quit marketing murder as a game.”

When I asked whether he was laying groundwork for a White House initiative, Axelrod said no: “Just one man’s observation.” A senior administration official, speaking on condition of anonymity, said today that Axelrod was not a stalking horse for Obama on this issue.

What if Lanza’s mother did everything she could, short of keeping her guns out her adult son’s reach? What if he wasn’t bullied?

What if there is nobody or nothing to blame? Would that make this inexplicable horror unbearable?

What if we didn’t rush to judgement? What if we didn’t waste our thoughts, prayers and actions on assigning blame for the sake of mere recrimination? What if we calmly and ruthlessly learned whatever lessons we can from the massacre — and prevented the next one?

What if it wasn’t one thing, but everything, that set off Lanza?

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N. Korea displays Kim Jong Il a year after death

PYONGYANG, North Korea (AP) — North Korea unveiled the embalmed body of Kim Jong Il, still in his trademark khaki jumpsuit, on the anniversary of his death Monday as mourning mixed with pride over a recent satellite launch that was a long-held goal of the late authoritarian leader.

Kim lies in state a few floors below his father, national founder Kim Il Sung, in the Kumsusan mausoleum, the cavernous former presidential palace. Kim Jong Il is presented lying beneath a red blanket, a spotlight shining on his face in a room suffused in red.

Wails echoed through the chilly hall as a group of North Korean women sobbed into the sashes of their traditional Korean dresses as they bowed before his body. The hall bearing the glass coffin was opened to select visitors — including The Associated Press — for the first time since his death.

North Korea also unveiled Kim’s yacht and his armored train carriage, where he is said to have died. Among the personal belongings featured in the mausoleum are the parka, sunglasses and pointy platform shoes he famously wore in the last decades of his life. A MacBook Pro lay open on his desk.

North Koreans paid homage to Kim and basked in the success of last week’s launch of a long-range rocket that sent a satellite named after him to space.

The launch, condemned in many other capitals as a violation of bans against developing its missile technology, was portrayed not only as a gift to Kim Jong Il but also as proof that his young son, Kim Jong Un, has the strength and vision to lead the country.

The elder Kim died last Dec. 17 from a heart attack while traveling on his train. His death was followed by scenes of North Koreans dramatically wailing in the streets of Pyongyang, and of the 20-something son leading ranks of uniformed and gray-haired officials through funeral and mourning rites.

The mood in the capital was decidedly more upbeat a year later, with some of the euphoria carrying over from last Wednesday’s launch. The satellite bears one of Kim Jong Il’s nicknames, Kwangmyongsong, or “Lode Star,” a moniker given to him at birth according to the official lore.

Cameras were not allowed inside the mausoleum, and state media did not release any images of Kim Jong Il’s body.

With the death anniversary came a hint that Kim Jong Un himself might soon be a father.

His wife, Ri Sol Ju, was seen on state TV with what appeared to be a baby bump as she walked slowly next to her husband at the mausoleum, where they bowed to statues of Kim’s father and grandfather.

There is no official word from Pyongyang about a pregnancy. In addition, Ri is shown wearing a billowing traditional Korean dress in black that makes it difficult to know for sure.

North Koreans are reluctant to discuss details of the Kim family that have not been released by the state. Still there are rumors even in Pyongyang about whether the country’s first couple is expecting.

To honor Kim’s father, North Koreans stopped in their tracks at midday and bowed their heads as the national flag fluttered at half-staff along streets and from buildings.

Pyongyang construction workers took off their yellow hard hats and bowed at the waist as sirens wailed across the city for three minutes.

Tens of thousands of North Koreans gathered in the frigid plaza outside, newly transformed into a public park with lawns and pergolas. Geese flew past snow-tinged firs and swans dallied in the partly frozen moat that rings the vast complex in Pyongyang’s outskirts.

“Just when we were thinking how best to uphold our general, he passed away,” Kim Jong Ran said at the plaza. “But we upheld leader Kim Jong Un. … We regained our strength and we are filled with determination to work harder for our country.”

Speaking outside the mausoleum, renamed the Kumsusan Palace of the Sun, the military’s top political officer, Choe Ryong Hae, said North Korea should be proud of the satellite, calling it “a political event with great significance in the history of Korea and humanity.”

Much of the rest of the world, however, was swift in condemning the launch, which was seen by the United States and other nations as a thinly disguised cover for testing missile technology that could someday be used for a nuclear warhead.

The test, which the U.N. Security Council said violated a ban on launches using ballistic missile technology, underlined Kim Jong Un’s determination to continue carrying out his father’s hardline policies even if they draw international condemnation.

Washington said Monday it has no option but to seek to isolate Pyongyang further.

“What’s left to us is to continue to increase pressure on the North Korean regime and we are looking at how to best to do that, both bilaterally and with our partners going forward until they (North Korea) get the message. We are going to further isolate this regime,” U.S. State Department spokeswoman Victoria Nuland said.

Some outside experts worry that Pyongyang’s next move will be to press ahead with a nuclear test in the coming weeks, a step toward building a warhead small enough to be carried by a long-range missile.

Despite inviting further isolation for his impoverished nation and the threat of stiffer sanctions, Kim Jong Un won national prestige and clout by going ahead with the rocket launch.

At a memorial service on Sunday, North Korea’s top leadership not only eulogized Kim Jong Il, but also praised his son. Kim Yong Nam, president of the Presidium of North Korea’s parliament, called the launch a “shining victory” and an emblem of the promise that lies ahead with Kim Jong Un in power.

The rocket’s success also fits neatly into the narrative of Kim Jong Il’s death. Even before he died, the father had laid the groundwork for his son to inherit a government focused on science, technology and improving the economy. And his pursuit of nuclear weapons and the policy of putting the military ahead of all other national concerns have also carried into Kim Jong Un’s reign.

In a sign of the rocket launch’s importance, Kim Jong Un invited the scientists in charge of it to attend the mourning rites in Pyongyang, according to state media.

The reopening of the mausoleum on the anniversary of the leader’s death follows tradition. Kumsusan, the palace where his father, Kim Il Sung, served as president, was reopened as a mausoleum on the anniversary of his death in 1994.

___

Associated Press writers Hyung-jin Kim in Seoul, South Korea, and Matthew Pennington in Washington contributed to this report. Follow Jean Lee, AP’s bureau chief for Pyongyang and Seoul, at www.twitter.com/newsjean.

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Obama: ‘We can’t tolerate this anymore’

President Barack Obama assured the grieving, shell-shocked Newtown community on Sunday that "you are not alone" and vowed sternly to wield "whatever power this office holds" in a quest to prevent future mass shootings.

"We can't tolerate this anymore," Obama said from behind a podium on the stage of a Newton High School auditorium, as adults wept, or hugged, or sat quietly, many hugging small children. "These tragedies must end. And to end them, we must change."

"In the coming weeks, I'll use whatever power this office holds to engage my fellow citizens -- from law enforcement, to mental health professionals, to parents, and educators -- in an effort aimed at preventing more tragedies like this, because what choice do we have?"he said.

The speech, broadcast nationwide, offered the bold suggestion that Obama might engage lawmakers on the subject of gun control -- a topic that has not been among his top priorities during his presidency.

"We can't accept events like this as routine. Are we really prepared to say that we're powerless in the face of such carnage?" Obama said.  That the politics are too hard? Are we prepared to say that such violence visited on our children year, after year, after year is somehow the price of our freedom?"

There were sobs from the crowd as the president read the first names of the 20 children slaughtered at Sandy Hook Elementary School on Friday and paid tribute to the six adults who died defending them. Twenty-six candles in twenty-six shining glass vases shone from the base of the podium.

Obama anticipated — and dismissed — some of the time-honored arguments against stricter restrictions on guns. "We will be told that the causes of such violence are complex, and that is true," he said. "No single law no set of laws can eliminate evil from the world or prevent every senseless act of violence in our society."

"But that can't be an excuse for inaction. Surely we can do better than this," he said. 

Across the country, people grieved for the 20 children — six and seven years old — and six adults killed in one of the worst mass shootings in America's history.

In Newtown and elsewhere, mourners gently piled notes, stuffed animals and American flags, balloons and flowers, in makeshift memorials where candles fluttered.

New York Giants wide receiver Victor Cruz played wearing a shoe that read "R.I.P. Jack Pinto" in black marker, an homage to a child slain in the massacre. Flags from coast to coast flew at half-staff. As the president's motorcade climbed the hill up the school, he could glimpse a few homes with Christmas lights -- but most were dark.

"Here in Newtown, I come to offer the love and prayers of a nation," the president said. "I am very mindful that mere words cannot match the depths of your sorrow, nor can they heal your wounded hearts."

"I can only hope it helps for you to know you are not alone in your grief that our world too has been torn apart. That all across this land of ours, we have wept with you. We've pulled our children tight," Obama said. "And you must know that whatever measure of comfort we can provide, we will provide. Whatever portion of sadness that we can share with you to ease this heavy load, we will gladly bear it."

In the auditorium where the president spoke, the audience included a large number of elementary school-age children, some carrying cuddly toys like teddy bears, according to pool reporter Stephen Collinson of Agence France-Presse.

Before the service, Obama met privately for more than an hour with families of the victims and emergency workers who responded to the crisis. As those workers entered the auditorium, the crowd erupted in a standing ovation. Some traded long hugs with members of the audience.

"We needed this. We needed to be together," said Rev. Matt Crebbin, the senior minister at Newtown Congregational Church. "These darkest days of our community shall not be the final word heard from us."

Connecticut Governor Dannel Malloy, describing his meeting with Obama, said that the president had called Friday "the most difficult day of  his presidency."

By 4 p.m., the line cars trying to reach the interfaith vigil stretched more than 2 miles from Newtown High School back through Sandy Hook -- and its growing makeshift memorial -- to Saint Rose church, the site of several vigils for (and hoax threats related to) Friday's massacre.

In Sandy Hook center, a lawn displayed lights with the phrase "FAITH. HOPE. LOVE." Across the street, a sign wrapped around a street lamp read, "Heaven must have been short on 27 angels."

The president spoke about the shooting on Friday,  his voice choked with emotion, one finger wiping away tears as they welled up. He vowed to "take meaningful action, regardless of the politics" to try to prevent future such tragedies. But hours before,  White House press secretary Jay Carney had decreed that "today's not the day" to discuss possible gun control measures.

The Obama administration has reportedly considered new gun restrictions in the past, only to shelve them.

The White House has shied from seeking tough new action from Congress — where new restrictions on gun purchases would likely run into stiff Republican opposition.

Obama's speech was the fourth in his presidency to memorialize a mass shooting. After the January 2011 rampage in Tucson, AZ, where then-Rep. Gabrielle Giffords was critically injured, the president spoke at a memorial for the six people killed, including Christina Taylor Green, 9.

Dylan Stableford contributed from Newtown

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Jack Hanlon, actor in Our Gang films, dies in NV

RENO, Nev. (AP) — Jack Hanlon, who had roles in the 1926 silent classic “The General” and in two 1927 “Our Gang” comedies, died Thursday in Las Vegas at the age of 96.

His niece, Wendy Putnam Park of Las Vegas, says the precocious, freckle-faced Hanlon was a natural as a child actor from 1926 to 1933.

After a small role with Buster Keaton in “The General,” he played mischievous kids in two of Hal Roach’s “Our Gang/Little Rascals” films: “The Glorious Fourth” and “Olympic Games.”

Hanlon also played an orphan in the 1929 drama “The Shakedown,” and got an on-screen kiss from Greta Garbo in the 1930 film “Romance.”

After leaving Hollywood, Hanlon became a furniture mover and moved to Las Vegas in 1994.

Burial will be in Santa Monica, Calif.

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Boehner opens door to tax hikes, shifts U.S. fiscal cliff talks

WASHINGTON (Reuters) – U.S. House of Representatives Speaker John Boehner‘s offer to accept a tax rate increase for the wealthiest Americans knocks down a key Republican road block to a deal resolving the year-end “fiscal cliff.”

The question now boils down to what President Barack Obama offers in return. Such major questions, still unanswered so close to the end of the year suggest, however, that no spending and tax agreement is imminent.

A source familiar with the Obama-Boehner talks confirmed that Boehner proposed extending low tax rates for everyone who has less than $ 1 million in net annual income, meaning tax rates would rise on all above that line.

Under current law, the 35 percent top tax rate is scheduled to expire on January 1, and would automatically go to 39.6 percent. Boehner’s proposal would allow that rate to rise as scheduled at a threshold of $ 1 million – putting it back to where it was during the Clinton administration.

The White House has not accepted the proposal and the source could not confirm any additional talks were held on Sunday between Obama and Boehner.

With just over two weeks before the fiscal cliff’s $ 600 billion in automatic tax hikes and spending cuts are triggered, threatening a new recession, there is little time to craft a comprehensive deal that will satisfy both Democrats and Republicans.

Until the latest Republican offer, made on Friday, Boehner had insisted on extending all of the Bush era’s lower tax rates, resisting Obama’s demand to let the marginal rates rise on income above $ 250,000. A rising chorus of business executives also had urged Republicans to agree to this.

Some lawmakers and congressional aides had predicted that Republicans, once serious negotiations began, might try to raise the $ 250,000 threshold, say to $ 500,000 or $ 1 million. They also speculated that Republicans, if forced into a tax rate hike on the upper-income groups, might seek a smaller increase, say to around 37 percent.

Although the White House has not accepted Boehner’s gambit, it could push negotiations away from entrenched, ideological positions.

“Boehner has now accepted the premise of higher rates. So now we’re just arguing over details. I think it’s a significant step,” said Greg Valliere, chief political strategist at Potomac Research Group.

A framework deal spelling out tax revenue and spending cut targets to be finalized in the new year could be possible, Valliere said.

“Boehner’s offer to allow tax rates to go up for taxpayers earning over $ 1 million fundamentally transforms fiscal cliff negotiations,” added Sean West, U.S. policy analyst at Eurasia Group, a political risk consultancy.

In a note to clients, West wrote that it signals, significantly, that Boehner ultimately believes a deal to avoid the cliff is still possible.

“The political burden is now shifted back to the president, who must be willing to take on his party in order to get a deal Boehner can ultimately pass. We do not think the president will overreach: Obama will work with Boehner to get to a deal.”

There are still several critical elements to a deal besides a tax rate increase on the wealthy, including Republican demands to cut spending on social programs.

Changes to the expensive Medicare and Medicaid health care programs for the elderly and the poor could be central to any deal, which must also include an increase in the federal debt limit needed by the end of February.

DEMANDS SOCIAL PROGRAM CUTS

Boehner conditioned his tax rate increase offer on Obama’s agreement to cuts in social program spending, often called entitlements.

Many Republican lawmakers want to raise the eligibility age for Medicare to 67 from 65. They also want to link Medicare to the income of recipients, making wealthier retirees pay more for their care.

Currently, Medicare does have some means testing, charging higher premiums for coverage of doctors visits and prescription drugs to individuals earning more than $ 85,000 and married couples earning more than $ 170,000. Only about 5 percent of recipients pay these higher premiums.

Thus far, Obama has offered only about $ 400 billion in 10-year entitlement savings, mostly through small adjustments in reining in health care costs – not fundamental changes such as raising the eligibility age.

And just as Boehner faces opposition in his own party to raising any tax rates, Obama faces opposition to cuts to Medicare, Medicaid and Social Security from Democrats, who pledged in election campaigns they would protect these programs.

A major bloc of congressional Democrats has already signaled they will not accept major cutbacks in Medicare as part of any fiscal cliff deal.

House Minority Leader Nancy Pelosi of California and Maryland Representative Chris Van Hollen of Maryland are among the high ranking Democrats in the House who have come out forcefully in recent days against raising the age for eligibility for Medicare to 67 years of age.

“Given the level of savings that is being talked about from Medicare, you can’t get it all from providers and drug makers,” said Paul Heldman, an analyst at Potomac Research, which tracks Washington policy for investors.

“So opponents of raising the eligibility age have reason to believe beneficiaries will take some sort of hit if a mega-deal is cut,” he said.

If Republicans are not successful in securing entitlement program cuts in exchange for a tax-rate increase on the wealthy, they are adamant about using a debt-limit increase as leverage to overhaul Social Security and Medicare.

The U.S. Treasury expects to reach its $ 16.4 trillion statutory debt cap by year-end, and will exhaust its remaining borrowing capacity around mid-February, risking a potential default.

Louisiana Republican Representative John Fleming, a member of the conservative Tea Party caucus who has never voted to increase the debt ceiling, said he would support a debt limit hike if it were part of a deal to make Medicare and Social Security sustainable.

The pace of activity could pick up the coming week.

House Republicans were told to prepare for a possible weekend session next week, potentially interrupting travel plans for the long Christmas holiday weekend.

House Majority Leader Eric Cantor scheduled “possible legislation related to expiring provisions of law,” a reference to the expiring tax cuts, for the end of the week, portending a weekend session. Cantor has said the House would meet through the Christmas holidays and beyond.

(This story was fixed to correct current top tax rate to 35 percent from 36 percent)

(Additional reporting by Thomas Ferraro, Richard Cowan and Kim Dixon; Editing by Fred Barbash, Todd Eastham and Jackie Frank)

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Egyptians hand Islamists narrow win in constitution vote

CAIRO (Reuters) – Egyptians voted in favor of a constitution shaped by Islamists but opposed by other groups who fear it will divide the Arab world’s biggest nation, officials in rival camps said on Sunday after the first round of a two-stage referendum.

Next week’s second round is likely to give another “yes” vote as it includes districts seen as more sympathetic towards Islamists, analysts say, meaning the constitution would be approved.

But the narrow win so far gives Islamist President Mohamed Mursi only limited grounds for celebration by showing the wide rifts in a country where he needs to build a consensus for tough economic reforms.

The Muslim Brotherhood‘s party, which propelled Mursi to office in a June election, said 56.5 percent backed the text. Official results are not expected until after the next round.

While an opposition official conceded the “yes” camp appeared to have won the first round, the opposition National Salvation Front said in a statement that voting abuses meant a rerun was needed – although it did not explicitly challenge the Brotherhood‘s vote tally.

Rights groups reported abuses such as polling stations opening late, officials telling people how to vote and bribery. They also criticized widespread religious campaigning which portrayed “no” voters as heretics.

A joint statement by seven human rights groups urged the referendum’s organizers “to avoid these mistakes in the second stage of the referendum and to restage the first phase again”.

Mursi and his backers say the constitution is vital to move Egypt’s democratic transition forward. Opponents say the basic law is too Islamist and tramples on minority rights, including those of Christians who make up 10 percent of the population.

The build-up to Saturday’s vote was marred by deadly protests. Demonstrations erupted when Mursi awarded himself extra powers on November 22 and then fast-tracked the constitution through an assembly dominated by his Islamist allies.

However, the vote passed off calmly with long queues in Cairo and several other places, though unofficial tallies indicated turnout was around a third of the 26 million people eligible to vote this time. The vote was staggered because many judges needed to oversee polling staged a boycott in protest.

The opposition had said the vote should not have been held given the violent protests. Foreign governments are watching closely how the Islamists, long viewed warily in the West, handle themselves in power.

“It’s wrong to have a vote or referendum with the country in the state it is – blood and killings, and no security,” said Emad Sobhy, a voter who lives in Cairo. “Holding a referendum with the country as it is cannot give you a proper result.”

INCREASINGLY DIVIDED

As polls closed, Islamists attacked the offices of the newspaper of the liberal Wafd party, part of the opposition National Salvation Front coalition that pushed for a “no” vote.

“The referendum was 56.5 percent for the ‘yes’ vote,” a senior official in the Brotherhood’s Freedom and Justice Party operations room set up to monitor voting told Reuters.

The Brotherhood and its party had representatives at polling stations across the 10 areas, including Cairo, in this round. The official, who asked not to be identified, said the tally was based on counts from more than 99 percent of polling stations.

“The nation is increasingly divided and the pillars of state are swaying,” opposition politician Mohamed ElBaradei wrote on Twitter. “Poverty and illiteracy are fertile grounds for trading with religion. The level of awareness is rising fast.”

One opposition official also told Reuters the vote appeared to have gone in favor of Islamists who backed the constitution.

The opposition initially said its exit polls indicated the “no” camp would win comfortably, but officials changed tack during the night. One opposition official said in the early hours of Sunday that it would be “very close”.

A narrow loss could still hearten leftists, socialists, Christians and more liberal-minded Muslims who make up the disparate opposition, which has been beaten in two elections since Hosni Mubarak was overthrown last year.

They were drawn together to oppose what they saw as a power grab by Mursi as he pushed through the constitution. The National Salvation Front includes prominent figures such as ElBaradei, former Arab League chief Amr Moussa and firebrand leftist Hamdeen Sabahy.

If the constitution is approved, a parliamentary election will follow early next year.

DEADLY VIOLENCE

Analysts question whether the opposition group will keep together until the parliamentary election. The Islamist-dominated lower house of parliament elected earlier this year was dissolved based on a court order in June.

Violence in Cairo and other cities has plagued the run-up to the referendum. At least eight people were killed when rival camps clashed during demonstrations outside the presidential palace earlier this month.

In order to pass, the constitution must be approved by more than 50 percent of those casting ballots. There are 51 million eligible voters in the nation of 83 million.

Islamists have been counting on their disciplined ranks of supporters and on Egyptians desperate for an end to turmoil that has hammered the economy and sent Egypt’s pound to eight-year lows against the dollar.

The army deployed about 120,000 troops and 6,000 tanks and armored vehicles to protect polling stations and other government buildings. While the military backed Mubarak and his predecessors, it has not intervened in the present crisis.

(Additional reporting Yasmin Saleh and Marwa Awad; Writing by Edmund Blair and Giles Elgood; Editing by Tom Pfeiffer)

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