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Prince Harry goes to Washington

Britain’s Prince Harry,U.S.first lady Michelle Obama and Dr.Jill Biden,wife of the vice president,listen to Marine Sgt.Roderic Liggens perform on the drums at the USO Warrior and Family Center at Fort Belvoir,Virginia,on,Wedensday,October 28.

The prince,Obama and Biden laugh as they listen to a music presen tation by  wounded warriors at the center on October 28.

Washington (CNN)“All right ladies … Prince Harry is here! Don’t look like you don’t notice!”

That’s how an enthusiastic First Lady Michelle Obama kicked off the blushing bearded royal’s whirlwind trip to the United States Wednesday, which included an informal meeting with President Barack Obama and a trip to the British Embassy.

Harry traveled Washington to promote the 2016 Invictus Games, an international sporting competition for wounded servicemen set to take place in Florida next year.

“I guess I should apologize in advance for all the gold medals that America will win in Orlando,” the first lady teased, addressing a crowd of veterans and their families gathered in the sports hall of Fort Belvoir.

The prince, who served in Afghanistan, toured the Virginia base alongside the first lady and Jill Biden. While there he observed programs that aim to help with recovery, including art and music therapy, before watching a wheelchair basketball game.

Harry, 31, told the service members there that his deployments deeply impacted him.

“I’m in no doubt that my two deployments to Afghanistan changed the direction of my life. There is very little that can truly prepare you for the reality of war,” the prince said. “The experiences can be stark and long-lasting. “

Harry said that he realized he had a responsibility to help veterans “lead healthy and dignified lives after service” while he was traveling home from his first deployment Afghanistan with three critically injured British soldiers. He started the international Invictus Games last year in London after a visit to the American Warrior Games in Colorado sparked the idea.

“I saw the power that sport could play in the recovery of both mind and body — I thought that surely everyone whether connected to the armed forces or not would be inspired by their achievements,” he said.

Later in the afternoon Obama praised Harry’s work with veterans and thanked him for his service in Afghanistan, using the moment to highlight “the incredible bond” shared between the U.S. and U.K.

Harry’s trip to Washington Wednesday was decidedly less exciting than his 2013 visit, when dozens of female staffers gathered in the U.S. Capitol’s Russell Rotunda, defying Capitol police while screaming and attempting to take photos of the royal bachelor.

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Orbiting bacteria: Space Station may need some tidying up

(CNN)The next time NASA picks an astronaut to live in the International Space Station, it might want to send Mr. Clean. That’s because scientists using a kind of high-tech white glove test found something in the space dust there.

The astronauts are not alone, it turns out. They share tight quarters with some previously undetected, opportunistic bacterial pathogens.

See what it's like to live on Mars

They don’t call this bacteria “opportunistic” for nothing, said KasthuriVenkateswaran who worked on the research at NASA’s Jet Propulsion Laboratory and co-authored the paper in the latest issue of the journal Microbiome.

This bacteria, by its very nature, is “looking for an opportunity to become pathogenic,” Venkateswaran said. Meaning these little pests are mostly innocuous on Earth, but under the extreme environment of space, it could behave differently. The DNA test researchers used to identify them could not determine whether the bacteria could hurt astronaut health, since it is based on a genetic analysis, but microgravity can change bacterial behavior, earlier studies showed.

Currently, astronauts spend six months on the space station, but as NASA eyes a much longer mission to Mars — a journey that could take two years — the agency will want to make sure its astronauts won’t be exposed to anything that could harm them.

Out of an abundance of caution, it is worth monitoring more carefully, researchers said. Exactly how did the bacteria Corynebacterium (a bacteria that could cause respiratory infection) andPropionibacterium (bacteria that could cause acne) end up in the space station?

“Humans are great fermenters,” Venkateswaran said. In other words, bacteria hitched a ride to see the galaxy on the astronauts’ themselves. It’s not that astronauts are bad bathers. It’s that naturally we humans play host to tens of billions of mostly harmless bacteria

An earlier study found that when you enter a room, you add 37 million bacteria to the air for each hour you are there. Venkateswaran believes the bacteria became a freeloader on the payload. Cargo is cleaned, but apparently it may not be scrubbed enough.

See an orbit of Earth from space

Venkateswaran said these bacteria are not a new space station tenant. What’s changed is the method used to find them. “This is the DNA age,” Venkateswaran said. His team won the bid to use the latest DNA technology to “predict what is going on, rather than doing this using 100-year-old technology.” In other words, they didn’t want to bring a Progressive Era-weapon to a space age bacteria fight.

The team compared dust samples collected in an air filter and vacuum from the space station to cleanrooms based at the Jet Propulsion Laboratory on Earth. The bacteria were found in a much greater numbers on the station.

There are differences between the two environments other than their location. Cleanrooms circulate fresh air. The space station must recirculate the same air. While there are only six people at a time in the space station, they don’t leave for months, as compared to the 50 or so people who typically use the cleanrooms and go in and out.

This astronaut would probably stay in space if she could

Using the latest DNA sequencing technology on these samples gave Venkateswaran’s team a much more detailed sense of what was up there and now with this study, NASA has an established baseline for being able to monitor exactly how clean the space station is and the cleanliness of other spacecraft on future missions.

Developing a better biosensor for space may also one day have an Earthly application. Venkateswaran said it could lead to developing a better biosensor for commercial airlines, which might lead to better monitored, or maybe even healthier, air.

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Kevin McCarthy drops out of House speaker race

Washington (CNN)House Majority Leader Kevin McCarthy dropped out of the race to succeed SpeakerJohn Boehner on Thursday, a shocking move that throws the House into chaos.

“I think I shocked some of you, huh?” McCarthy told reporters following the decision.

Boehner is poised to resign at the end of the month. There is no clear successor who can overcome the deep divisions in the party and win the post. An influential group of conservatives endorsed a long-shot candidate, Rep. Daniel Webster, on Wednesday, placing McCarthy’s ability to win the House floor vote later this month in doubt.

“If we’re going to unite and be strong, we need a new face to do that,” McCarthy said, adding that he did not want to win the race on the House floor with only enough votes to squeak by.

A source close to McCarthy told CNN the decision to drop out came down to “numbers, pure and simple,” adding that “he had the votes to win the conference vote, but there just wasn’t a path to 218″ — the number of votes needed to lock down the speakership on the House floor.

The uncertain future of House GOP leadership comes less than a month before Congress must take action to raise the debt ceiling to keep the U.S. from defaulting on its debt obligations — a critical vote conservatives have in the past sought to stall in order to pull concessions from Democrats.

Senate Minority Leader Harry Reid was quick to call on Republicans to “bring a clean debt ceiling increase to the floors of the House and Senate immediately” to avoid a credit downgrade. “Republican chaos is likely to get worse before it gets better but the economic livelihood of the American people should not be threatened as a result of Republicans’ inability to govern,” Reid said in a statement.

McCarthy’s candidacy ran into trouble last week after he suggested that the House’s committee on Benghazi was an attempt to hurt Hillary Clinton’s poll numbers.

Asked if that affected his decision, McCarthy acknowledged: “Well, that wasn’t helpful.”

Rep. Dana Rohrabacher, R-California, described McCarthy’s move as “courageous,” saying this is “exciting” for the party because there is now a “wide open” race for speaker.

“Because of his verbal blunder last week there were some of us that were very apprehensive and this going to create great unity among Republicans,” Rohrabacher said.

Meanwhile, not one to miss an opportunity, GOP presidential candidate Donald Trump suggested he was partly responsible for McCarthy’s failed bid, days after he suggested McCarthy wasn’t tough enough for the job.

“They’re giving me a lot of credit for that because I said you really need someone very, very, tough and very smart. Ya know smart goes with tough, I know tough people that aren’t smart that’s the worst. We need smart, we need tough, we need the whole package,” Trump said at a campaign stop Thursday in Las Vegas.

Who’s next?

The announcement immediately set off a round of speculation about who could win the job. Perennial candidates floated included Wisconsin Rep. Paul Ryan and South Carolina Rep. Trey Gowdy — both of whom ruled it out explicitly. Several House Republicans said Georgia Rep. Lynn Westmoreland was considering it, and others suggested Oregon Rep. Greg Walden, the chairman of the National Republican Congressional Committee.

“I would consider it,” Walden said when asked by CNN about members floating his name for speaker. But he said he’s not actively campaigning and noted that some are pushing the idea of an interim speaker. Several candidates have suggested a senior or retiring member should serve as speaker for the next 14 months and pledge to not run again. Rohrabacher suggested Texas Rep. Joe Barton or Kentucky Rep. Hal Rogers.

Boehner said in a statement he will remain in his post until a new speaker is elected, though he has yet to announce the date for the new vote.

“I’m confident we will elect a new speaker in the coming weeks. Our conference will work together to ensure we have the strongest team possible as we continue to focus on the American people’s priorities,” he said in a written statement.

Boehner also canceled a scheduled appearance Thursday night on “The Tonight Show with Jimmy Fallon,” an NBC spokeswoman said.

Republican Study Committee Chairman Bill Flores twice dodged reporters’ questions about whether he would rule out his own run, but also spoke against the idea of a caretaker.

“An interim will not give us the opportunity to cast that big bold vision that we need. Interims are caretakers, caretakers tend to do safe things,” Flores said. “The electorate put us here in November of 2014 to take big steps, and we need to find the leader that will help us take those big steps. … The other thing that happens with interim is you have people trying to run for the permanent position, and so you have all the distractions we’ve gone through the last two weeks. We don’t need that.”

Rep. Jason Chaffetz, who late last week jumped into the speaker’s race, called an impromptu news conference less than an hour after Republicans began pouring out of the GOP conference meeting. The Utah Republican said he was also “absolutely stunned, surprised and shocked.”

Chaffetz said he would continue to campaign for the top House post and said “we need to find somebody that our whole body can unite behind and do what were elected to do.”

“I do believe it is time for a fresh start. That was the whole genesis for my campaign, but we need to have a lot more family discussion,” he said. “I think we have a lot of internal fracturing that’s happening. And we need to figure out a way to unite the party.”

Westmoreland joked said he is thinking about it, joking that, “I’d like to talk to my wife first.”

Asked why he thought he could get 218 votes he said, “I don’t know that I can, but all I can say is I’m willing to try.”

Ryan, the chairman of the Ways and Means Committee and someone who had been viewed as a contender for the job, immediately said he is not interested.

“While I am grateful for the encouragement I’ve received, I will not be a candidate. I continue to believe I can best serve the country and this conference as Chairman of the Ways and Means Committee,” Ryan said in a statement.

With conservatives again floating his name, Gowdy said he will not run for speaker. Asked if he would reconsider and join the race if his GOP colleagues urged him to get in, he replied, “No.”

Immediate reaction

 

Rep. Tim Huelskamp, a Kansas Republican and member of the conservative House Freedom Caucus that opposed McCarthy’s bid, said the decision creates a “brand new race for speaker.”

“I am not the one,” McCarthy told the stunned Republicans in the meeting, according to Huelskamp.

Huelskamp also took shots at McCarthy, saying the majority leader was campaigning for the top post until “three hours ago” and said the lack of “advance notice” was characteristic of the “stunts” that have defined Boehner’s leadership as speaker — including his surprise resignation the day after Pope Francis addressed a joint meeting of Congress.

And just as McCarthy got a brief heads up moments before that announcement, McCarthy also gave Boehner notice shortly before Thursday’s conference meeting, a Boehner aide told CNN.

Members had no indication the move was coming. “Totally stunned,” Rep. Peter King, R-New York, said on CNN.

Westmoreland met with McCarthy in his office this afternoon and said he didn’t expect him to endorse anyone.

“What Kevin has done is extremely selfless, and I think he’s done a brave and courageous thing,” said Rep. Louie Gohmert, R-Texas. “He was close to being right there and he chose to unite the conference rather than waging battles. “

Reminder of late 1990s chaos

 

Speaking on CNN, Rep. Walter Jones said the current unrest reminds him of the late 1990s. Newt Gingrich stepped down as speaker and Rep. Bob Livingston was selected to take over but quickly removed himself from consideration after it was revealed he had an extramarital affair.

Jones wrote an open letter Tuesday stating any leadership candidate should quit their campaigns “if there are any misdeeds he has committed since joining Congress that will embarrass himself, the Republican Conference, and the House of Representatives if they become public.”

Jones told CNN that he was looking out for the institution and not pointing fingers at anyone in particular.

“I think when a person has been a member of the Congress — which is a very sacred duty, quite frankly, in my opinion — and they are elevated to become a leader of a party — could be either party, Republican or Democrat — that those in leadership must be above reproach,” Jones said.

“And all I was doing, not trying to single anybody out, but was to say in this makeup of office — the majority office and the speakers office — all the members should be made to say I have nothing in my background that could be of embarrassment to the Republican conference, the House of Representatives or the American people,” he added. “That’s all this was about.”

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Joe Biden won’t run for president

(CNN)Vice President Joe Biden ended months of intense speculation about his political future on Wednesday with a sudden announcement that he wouldn’t seek the presidency, abandoning a dream he’s harbored for decades and putting Hillary Clinton in a stronger position to capture the Democratic nomination.

With his wife, Jill, and President Barack Obama at his side in the White House Rose Garden, Biden said the window for a successful campaign “has closed,” noting his family’s grief following the death of his son, Beau.

Still, Biden, who a spokesman said made his decision Tuesday night, positioned himself as a defender of the Obama legacy, implicitly suggesting that he still views himself as the best possible successor to the President.

In tone, the remarks sounded like the kind of speech defending staunch Democratic values that he might have given had he reached the opposite conclusion.

The vice president sent a pointed warning to the Democratic front-runner in his remarks, again apparently rebuking her for her comment in last week’s CNN Democratic debate that Republicans were her enemies.

“I believe that we have to end the divisive partisan politics that is ripping this country apart, and I think we can,” said Biden, who, though a crafty partisan, often worked across the aisle during nearly four decades in the Senate.

“It’s mean-spirited, it’s petty, and it’s gone on for much too long. I don’t believe, like some do, that it’s naive to talk to Republicans. I don’t think we should look at Republicans as our enemies. They are our opposition. They’re not our enemies.”

He added: “For the sake of the country, we have to work together.”

‘I will not be silent’

“While I will not be a candidate, I will not be silent,” he said in a speech that highlighted Democratic themes on income inequality along with a call for a national movement to cure cancer. “I intend to speak out clearly and forcefully, to influence as much as I can where we stand as a party and where we need to go as a nation.”

The question of whether Biden, 72, would enter the race has consumed Democrats for months, but in recent days, the vice president’s long period of deliberation had begun to frustrate some in the party — and there was rising pressure for him to declare his intentions.

PHOTOS: Joe Biden’s political life

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The prospect of a run seemed to decline further after Clinton’s commanding performance at the first Democratic presidential debate on October 13. Her poised demeanor and deft handling of tough questions left many analysts convinced that Clinton effectively froze Biden out of the race.

Two looming political events may have affected the timing of Biden’s announcement. On Thursday, Clinton appears before a Republican-led committee on Capitol Hill probing the deaths of four Americans in attacks on U.S. facilities in Benghazi, Libya, on September 11, 2012, when she was secretary of state. The vice president may not have wanted his decision to be seen as a judgment on her performance if it was made public after the hearing. Democrats are also gathering this weekend at an important party dinner in Iowa — a must stop for presidential candidates seeking the nomination and a Biden no-show would likely have severely hampered his chances in the state.

Implicit in Biden’s remarks was a realization that Clinton’s position and organizational muscle in early voting states are just too strong for him to mount a credible challenge at such a late stage — just three-and-a-half months before first votes are cast.

The vice president’s running room has been further curtailed by the unexpected strength of progressive champion Bernie Sanders who is running a close race to Clinton, in the first-in-the-nation primary state of New Hampshire.

By starting a campaign so late, Biden would have faced significant obstacles in raising the millions of dollars needed to give him a chance to win, and in setting up grassroots political organizations to wage the nomination fight across the nation.

Clinton, however, had only praise for Biden, describing him in a Tweet as “a good friend and a great man. Today and always, inspired by his optimism and commitment to change the world for the better,” she wrote. “She signed the Tweet “–H” signifying that she, and not a campaign aide, composed the message.

Sanders said in a statement that Biden had made a decision that he feels “is best for himself, his family and the country. I thank the vice president for a lifetime of public service and for all that he has done for our nation.”

Missouri Democratic Sen. Claire McCaskill, a Clinton ally, said that Biden’s move would further solidify the former secretary of state’s control of the Democratic race.

“You can see from the polling numbers that have come out this week how that has certainly reassured and solidified her support among Democrats across the country,” she said. “I think this will push her even further in that direction.”

Democratic Senate Minority leader Harry Reid told CNN that Biden would have been a good candidate “but he made the right decision.”

And Republican front-runner Donald Trump combined a comment on Biden with a swipe at Clinton.

“I think Joe Biden made correct decision for him & his family. Personally, I would rather run against Hillary because her record is so bad,” Trump wrote.

A CNN/ORC poll last week showed that Clinton held a 16 percentage point lead — 45% to Sanders’ 29% — with Biden in the race and drawing 18% support. But with Biden removed from the list of candidates, Clinton’s lead jumped to 56% to Sanders’ 33%.

Though Clinton had publicly said she was giving Biden all the space and time he needed, there were signs her campaign was preparing to run against the vice president.

She has staked out several positions in recent weeks — notably coming out against the Trans Pacific Partnership Trade deal that is backed by the Obama administration but opposed by many Democrats in a way that seemed to further narrow Biden’s options.

Biden’s move means that barring unexpected developments, his long political career, which includes nearly 40 years in the Senate and two terms as vice president, will end along with the Obama administration on January 20, 2017.

No genuine route to the nomination

 

With Biden bowing out, the Democratic nomination now comes down to a straight fight between Clinton and Sanders, assuming low-polling candidates such as former Maryland Gov. Martin O’Malley do not catch fire.

And his decision it spares Obama the awkward prospect of watching his vice president and former secretary of state battle to succeed him.

Biden’s political career spans 40 years and is bookended by tragedy. Soon after he won his Delaware Senate seat in 1972, his wife and infant daughter died in a car crash. Then in May 2015, his son Beau, an Iraq war veteran and his family’s hope to forge a political dynasty, died.

Though devastated by the loss, Biden’s consideration of a White House campaign may have been motivated by his dying son’s plea that he make a third run at the presidency.

He went through a highly public period of mourning and testing of the political waters, pouring out his heart on Stephen Colbert’s late night show, and emotionally admitting at public events that he simply did not know if his family had the emotional endurance for a race.

Previous campaigns

Biden’s previous two campaigns, in 1988 and 2008, barely caused a stir and foundered to a large extent because of his own indiscipline, a trait that earned him a reputation as gaffe-prone and which, allied with a garrulous temperament, led some to believe he was not of presidential caliber. Still, he was chosen for the No. 2 spot by Obama for his long experience in foreign policy and his deep knowledge of the Senate.

Biden’s career will now be remembered largely for his vice presidency, in which he was in the room for all major decisions and was at Obama’s side through dramas including the killing of Osama bin Laden and the passage of health care reform. He masterminded the implementation of the $800 billion stimulus plan which Democrats credit for staving off a second Great Depression and brokered a deal in 2012 to avert the so-called fiscal cliff.

But his most lasting contribution may be the way Biden lived his life. Every time fate dealt him a blow — including serious health issues when he had a brain aneurysm in 1988 — he got back up, refusing to be beaten. And with a dash of Irish blarney and his love for political combat, he maintained relationships across the political aisle that now seem like a throwback to a long-gone age of civility.

His political approach is tactile, and personal, interwoven with parables of working-class life, hewn from his upbringing in the gritty Pennsylvania city of Scranton and of family life in his adoptive state of Delaware.

But after spending the better part of 40 years being talked about as a potential president, Biden will likely not be able to look back on his decision to forgo a final 2016 run, without a tinge of regret that he fell just short of the highest prize.

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The Obama administration’s Syria strategy lacks direction.

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On Sunday(Oct. 11), President Barack Obama told Steve Kroft of “60 Minutes” that despite Russia’s armed intervention in Syria, he was going to stay the course. However, it is unclear what that course is, or why Obama believes it will lead to success.

 

There is little to cheer about in Syria. The United States has met none of its strategic objectives. The Islamic State group still controls as much territory as it did a year ago, if not more. A half-billion dollar U.S. Defense Department investment in training opposition fighters produced “four or five” who are probably either dead or fighting with the enemy. Air and drone strikes seem infrequent, routine and ineffective. And Syrian strongman President Bashar Assad, whom Obama demanded be removed from power over four years ago, is still in Damascus. With Moscow’s support, he is likely to remain there.

Part of the problem is the general aimlessness in the U.S. approach to Syria. The White House has consistently called for a negotiated transfer of power in Damascus to a coalition successor government, but it is unclear who would be part of it, what it would look like and, most importantly, how it would take power.

These questions are being sorted out on the battlefield. The opposition comprises a variety of political, ethnic and national groups, not always with complementary objectives. The largest complicating factor from the U.S. point of view is the Islamic State group, probably the strongest of the anti-Assad groups, but also a recognized terrorist organization that the U.S. and its coalition partners are actively fighting in Syria, Iraq and elsewhere. In addition, the Islamic State group fights the U.S-backed rebel groups. This puts Washington in a difficult three-way war, simultaneously opposing the Assad regime and the Islamic State, while supporting the insurgency being opposed by both.

U.S. involvement in the civil war has been ad hoc and undirected from the beginning. Obama called for the removal of Assad in 2011, but had no plan or concept for how this regime change could be brought about. Rebels were in the field, but the administration engaged in endless debate over whether or not to arm and train them, and what types of arms they could be trusted with. Coalition military action in Syria started in September 2014, as an extension of the Operation Inherent Resolve attacks against the Islamic State group begun in Iraq the previous summer. But there was no integrated strategy linking anti-Islamic State group action, support for the rebel groups and political action to remove Assad from power.

The international dimension was complicated by factors such as the Assad regime’s support from Iran and Russia, countries the White House was seeking to mollify in pursuit of a nuclear weapons deal with Tehran. So U.S. strategy in Syria has been framed as an anti-Islamic State group effort, putting a fig leaf over the inconvenient truth that Washington is supporting an armed insurgency against a Russian ally.

The White House finally announced a comprehensive strategy against the Islamic State group in the fall of 2014, featuring “nine lines of effort,” including denying safe haven in Syria, building partner capacity, enhancing intelligence collection, disrupting finances, stopping the flow of foreign fighters and humanitarian support. But the long-awaited strategy soon started changing, reflecting shifting facts on the ground and apparent disarray in the administration.

Smoke billows from the Syrian rebel-held area of Douma, east of the capital Damascus, following a reported air strike by government forces on Sept. 16, 2015.

Smoke billows from the Syrian rebel-held area of Douma, east of the capital Damascus, following a reported airstrike by government forces on Sept. 16.

By July 2015, the “nine lines” had been grouped into “four pillars”: air strikes, support for rebels on the ground, counter-terrorism efforts and humanitarian assistance. None of the pillars are holding much weight. Air strikes are probably the most effective, though they have not driven the Islamic State group out of its safe havens or led to dramatic battlefield victories. Counterterrorism measures, such as interdicting finances and intelligence coordination, have not had a measurable impact. Last week National Counterterrorism Center Director Nick Rasmussen told Congress that the Islamic State group had surpassed al-Qaida as the leading jihadist group, and “today there are more threats originating in more places,” including inside the United States.

Also last week the administration announced an “operational pause” in the lackluster train-and-equip program. Deputy special anti-Islamic State group envoy Brett McGurk claimed the administration was “not halting the program,” but “adapting it,” without saying what that meant. And the humanitarian assistance pillar has taken the form of attempting to mitigate the refugee crisis spilling out into Europe and the United States by resettling the displaced people. This is already creating political disruptions in the host states and is no replacement for creating enough stability in Syria for the refugees to return home, assuming they want to.

Russia’s intervention adds another layer of complexity to the strategic setting, though the White House is attempting studiously to ignore its implications. Russia’s objective is to maintain the Assad regime in power, which places it in direct opposition to the U.S. goal of a managed regime change. Moscow is moving forcefully to establish stability, striking anti-regime rebels of every stripe. In this respect Russia faces a less nuanced conflict. It is possible that Moscow is entering into another Afghanistan-like quagmire and has taken on more than it can sustain. But regardless, in the near term it places the United States in a more direct confrontation with Russia and complicates an already disjointed American strategy.

Staying the course, then, really means Obama simply continuing to muddle through the crisis.

 

U.S. Fed officials divide over timing of first rate hike

 U.S. Federal Reserve officials seem to divide over the appropriate timing for the first interest rate hike in almost nine years.

Fed Governor Daniel Tarullo said on Tuesday that it would not be appropriate to raise interest rates in 2015. The comments are going against opinions of other Fed officials, including chair Janet Yellen and vice chair Stanley Fischer, who expected the first interest rate hike would be initiated later this year.

“Given where I think the economy would go, I wouldn’t expect it would be appropriate to raise rates,” Tarullo said in an interview with broadcaster CNBC when asked if rates should be raised this year.

Tarullo was not the only Fed official supporting the postponement of interest rate hikes. Another Fed governor Lael Brainard said on Monday that she would take a waiting stance in deciding whether to raise interest rates, in view of the sluggish wage growth, persistently low inflation and possible downside risks from abroad.

“We should not take the continued strength of domestic demand growth for granted. Although the outlook for domestic demand is good, global forces are weighing on net exports and inflation, and the risks from abroad appear tilted to the downside,” said Brainard at the 57th National Association for Business Economics Annual Meeting on Monday.

During the past few months, the financial tightening that has already taken place has been comparable in its effect to the equivalent of a couple of rate increases, she said.

However, Yellen and Fischer supported the interest rate hike this year, saying that most FMOC (Federal Open Market Committee) participants, themselves included, anticipated an interest rate hike later this year, as long as the economy grows as expected.

During the IMF/World Bank annual meeting in Peru last week, Fischer said that what matters for overall financial conditions is expectations for the entire trajectory of short-term interest rates rather than the exact timing for the first interest rate hike, which Yellen also stressed in her speech at the end of September.

The U.S. economy is approaching full employment, with unemployment rate dropping to 5.1 percent in September, while the inflation has been persistently below the Fed target of 2 percent.

The central bank last month opted to delay an interest rate hike considering the low inflation environment as well as the turbulent global economic and financial market development.

Employees at company working with Clinton email server expressed concerns

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7 photos: Hillary Clinton email controversy

Washington (CNN)Employees at the company that maintained Hillary Clinton’s private email server expressed concern among themselves about the way the former secretary of state’s team directed them to manage data backups after the FBI started looking into the arrangements, according to emails obtained by a senator.

In a letter obtained by CNN, Senate Homeland Security and Governmental Affairs Committee Chairman Ron Johnson, R-Wisconsin, asks Datto, Inc, the makers of Clinton’s server back-up system, for information on how her emails were preserved and protected. The FBI has also sought information from the company, according to sources.

Johnson indicates that a “Clinton family company,” Clinton Executive Service Corp., paid for the back-up services, operated through a device called the Datto SIRIS S2000, and that the purchase was made by Platte River Networks when the server was moved from her private residence to a New Jersey-based data center in 2013.

In the letter, Johnson quotes from emails sent by and to employees at Platte River Networks, which indicate there was discussion about how the duration of data backups could be reduced, apparently at the direction of the Clinton Executive Service Corp.

Clinton on emails: ‘It is a drip-drip-drip’

Then this past August, a Platte River Networks employee wrote to a coworker that he was, “Starting to think this whole thing really is covering up some shaddy (sic) s**t.”

“I just think if we have it in writing that they told us to cut the backups, and that we can go public with our statement saying we have backups since day one, then we were told to trim to 30days (sic), it would make us look a WHOLE LOT better,” the unnamed employee continued.

The email was sent shortly after news emerged that the FBI was looking into the security of the server, and several months after it was revealed that Clinton exclusively used the private account to conduct State Department business.

The employee indicates in the email that Clinton’s team asked them to change the back-up duration between October and February, presumably of 2014/2015, though that isn’t explicitly stated in the portion of the email included in Johnson’s letter.

Clinton’s email controversy explained

In a statement Wednesday morning, the Clinton campaign accused Johnson of “ripping a page from the House Benghazi Committee’s playbook and mounting his own, taxpayer-funded sham of an investigation with the sole purpose of attacking Hillary Clinton politically.”

“The Justice Department’s independent review is led by nonpolitical, career professionals, and Ron Johnson has no business interfering with it for his own partisan ends,” campaign spokesman Brian Fallon said in the statement.

The committee did not share any of the emails with CNN, but excerpts and descriptions from them are printed in Johnson’s letter.

Emails sent between Datto and Platte River Networks during that time indicate there was confusion about where the backed-up data would be stored, and for a while it was backed-up to an off-site Datto server, apparently against the wishes of Clinton staff.

When Platte River Networks became aware of the off-site syncing issue, they contacted Datto and discussed how they could retrieve that data for storage on-site, according to Johnson’s letter.

“Despite these communications, it is unclear whether or not this course of action was followed,” Johnson said. “Additionally,questions still remain as to whether Datto actually transferred the data from its off-site datacenter to the on-site server, what data was backed up and whether Datto wiped the data after it was transferred.”

Johnson wrote to Datto seeking more information about their dealings with Platte River Networks and Clinton Executive Service Corp.

Johnson also asked the company to say whether Datto is authorized to store classified information, and whether any employees at the company have security clearances that would allow them to view classified information.

A timeline of Clinton’s email saga

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U.S. ignores calls on independent probe into Afghan hospital attack

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Protestors hold up their hands painted red as Commander of U.S. forces in Afghanistan John Campbell testifies during a Senate Armed Services Committee hearing on Capitol Hill in Washington D.C., the United States, Oct. 6, 2015. Campbell acknowledged on Tuesday a U.S. airstrike “mistakenly” struck a hospital in Kunduz, Afghanistan on Saturday that killed 22 civilians. (Xinhua/Yin Bogu)

WASHINGTON, Oct. 7 (Xinhua) — The U.S. State Department on Wednesday said the country is capable of investigations on its bombing of a hospital in Afghanistan.

“The Secretary (Ashton Carter) prefers the Defense Department to investigate this. The Secretary has the utmost trust and confidence in the Defense Department’s ongoing investigation,” State Department spokesman John Kirby said at a daily press briefing.

A Doctors Without Borders’ (MSF) hospital was bombed in a U.S. airstrike in Kunduz, Afghanistan, on Oct. 3. At least 22 people including 12 MSF staff were killed.

The attack shocked the international community and angered aid groups worldwide. It was the highest casualties the MSF had ever suffered in its war zones working history.

The MSF called the bombing a war crime and wanted an independent international committee to investigate the attack.

Kirby insisted that the Pentagon is capable of a “thorough and transparent inquiry” of the incident and there is no need for any outside body to conduct the investigations.

U.S. President Barack Obama apologized to MSF International President Joanne Liu by telephone on Wednesday, four days after the bombing.

Obama assured Liu that the U.S. would provide “a transparent, thorough and objective accounting of the facts and circumstances of the incident.”

Investigations by the U.S., NATO and the Afghan government are underway.

Related:

Backgrounder: Major airstrikes “mistakenly” hit civilians and local police by U.S., NATO

Obama calls Doctors Without Borders to apologize for U.S. airstrike “mistake”

WASHINGTON, Oct. 7 (Xinhua) — U.S. President Barack Obama has called Doctors Without Borders to apologize to it for the U.S. mistaken bombing of the organization-run hospital in Afghanistan, White House said Wednesday.

Obama’s apology came four days after at least 22 people, including 12 staff with Doctors Without Borders, also known as Medecins Sans Frontieres (MSF), were killed in the U.S. airstrike in Kunduz, Afghanistan, Saturday. The attack shocked the international community and angered aid groups worldwide.   Full story

U.S. military commander admits Afghan hospital “mistakenly struck” by airstrike

WASHINGTON, Oct. 6 (Xinhua) — Commander of U.S. forces in Afghanistan John Campbell acknowledged Tuesday a U.S. airstrike “mistakenly” struck a hospital in Kunduz, Afghanistan, Saturday that killed 22 civilians.

“A hospital was mistakenly struck. We would never intentionally target a protected medical facility,” said Campbell at a congressional hearing here amid protests from Doctors Without Borders, an aid agency which runs the hospital hit by the U.S. airstrike.   Full story

Arkansas couple died trying to shield daughter from twister

LITTLE ROCK, Ark. (AP) – Melissa and Michael Mooneyhan met as teenagers who attended different high schools. The two quickly fell in love and were married in 2004, even before they graduated.

 More than a decade later, the pair died shielding their young daughter from a tornado as the twister chewed up the family’s mobile home in Nashville, Arkansas.

The trailer “was just picked up and flipped over,” said Howard County Coroner John Gray, who said the home looked “like it had exploded.” He said it was “a miracle that little girl survived.”

“That poor little girl is never going to know them,” he added. “But she’s young enough that she’ll never remember what happened.”

The girl, who is about 18 months old, was taken to the hospital and later released to relatives.

Polly McCammack, who also lives in Nashville, is Melissa’s third cousin. A week ago, she said, the close-knit family lost their grandmother who “practically raised” Melissa and her siblings.

“The family has been hit hard. They’re strong, but it’s almost like to the point you’re afraid to breathe,” McCammack said.

Michael Mooneyhan worked in the deli department of the local Wal-Mart. Melissa was a stay-at-home mom doting on their daughter.

“That baby was definitely their life. They considered her their greatest blessing. You couldn’t find two parents who loved a child more,” McCammack said. “She’s going to grow up knowing family and knowing love.”

Family members went to the site of the destroyed home looking for mementos, toys and anything else they could salvage for the child, McCammack said.

The National Weather Service confirmed a tornado with a preliminary EF2 rating and winds estimated at 125 mph touched down in Nashville, a city of 4,500 people about 125 miles southwest of Little Rock.

During Sunday’s first tornado warning, the county’s tornado sirens sounded for so long that the battery was drained, Howard County Emergency Management Coordinator Sonny Raulerson said.

When a second warning was issued for about 16 miles south of Nashville, the sirens could not be activated, Raulerson said.

In neighboring Texas, a tornado pummeled the small city of Van, damaging or destroying 50 to 100 homes and killing two people, according to Chuck Allen, fire marshal and emergency management coordinator for Van Zandt County.

For much of the day, eight people were unaccounted for in Van, population 2,600, about 70 miles southeast of Dallas.

Texas Department of Public Safety Trooper Jean Dark said late Monday night that everyone on the missing list had been accounted for. However, she said that just to be safe, cadaver dogs were checking the area.

Officials confirmed that the tornado was an EF3, with winds from 135 mph to 140 mph, Allen said.

Rescuers went door to door amid the widespread damage, which included trees uprooted and numerous homes and buildings flattened or ripped apart.

At least 42 people were injured, according to two East Texas hospitals. Four patients were in critical condition.

James Crawford and his wife, Thelma, rode out the storm in their mobile home in the area with some of Van’s worst damage.

They were in bed and did not have time to run, she said. All she could do was roll over and give her husband a bear hug while they held on.

Thelma Crawford said she believes the home lifted off the ground a bit, then came back down.

“We’re like family in that neighborhood,” she said. “When one of them gets hurt, I hurt.”

In some cases, the fronts of homes were sheared off, revealing living room furniture tossed in a jumble. Houses were spray painted with an X to indicate they had been searched by emergency workers.

Kimberli Shane held a muddy hand to her forehead as she watched friends and neighbors salvage furniture from the home she rented.

“All I could really hear was the house pulling apart,” she said. “And my son saying, ‘Oh, no, it’s right over us.’”

Preliminary reports indicate 20 to 25 tornadoes formed Sunday in South Dakota, Iowa, Oklahoma and Texas, according to meteorologist Greg Carbin of the Storm Prediction Center in Norman, Oklahoma.

“This is certainly not an atypical system for spring where you’ve got the remnants of winter but the onset of summer,” Carbin said.

The same storm system dumped 11 inches of rain in some places and caused widespread flooding. Firefighters in Corsicana, Texas, 60 miles southwest of Van, recovered the body of a driver who had ventured into the floodwaters after his vehicle stalled in a swollen creek.

The heavy rain caused a huge sinkhole to open up in Granbury, some 40 miles southwest of Fort Worth. The 40-foot-wide sinkhole swallowed the parking lot of a supermarket and damaged water and sewer lines beneath, WFAA-TV reported.

Army says no decision made in Bergdahl investigation

U.S. Army Sergeant Bowe Berghdal is pictured in this undated handout photo provided by the U.S. Army and received by Reuters on May 31, 2014. REUTERS/U.S. Army/Handout via Reuters

The U.S. Army on Tuesday denied that a decision had been made to bring desertion charges against Sergeant Bowe Bergdahl, who was released last year in a controversial prisoner swap after disappearing from his base in Afghanistan in 2009.

NBC News said earlier on Tuesday that Bergdahl would be charged with desertion, citing senior defense officials.

Major General Ronald Lewis, the Army’s head of public affairs, said that report, and another from Fox News, were “patently false.”

“To be clear there have been no actions or decisions on the Sergeant Bergdahl investigation,” Lewis said in a statement.

“The investigation is still with the commanding general of U.S. Army Forces Command (General Mark Milley) who will determine appropriate action – which ranges from no further action to convening a court-martial,” he added.

The Pentagon’s press secretary, Rear Admiral John Kirby, told a news conference that no decision had been made in the case and said Milley was under no pressure to make a decision on any timeline.

Top defense officials are sensitive about exercising any undue influence on officers responsible for cases in the military legal system.

Bergdahl, who spent five years in captivity after leaving his post, was released in May in an exchange with the Taliban for five inmates from the U.S. prison in Guantanamo Bay,Cuba. The deal was blasted by some Republicans, and some of his fellow soldiers called him a deserter.

General Milley received the findings of Army investigators late last month, is reviewing them and has not publicly indicated whether charges will be filed, said Jim Hinnant, a spokesman for U.S. Forces Command at Fort Bragg, North Carolina.

Milley is expected to make a decision soon on whether the findings merit a court-martial or some form of administrative punishment. The general also could decide no action against Bergdahl is warranted.

“There is no timeline to make that decision and General Milley is not being put under pressure to make a decision either way,” Kirby told reporters.

Bergdahl’s attorney, New Haven, Connecticut-based Eugene Fidell, declined to comment on the media reports.

If officials conclude that Bergdahl broke U.S. military law, they could force him to forfeit hundreds of thousands of dollars in back pay accumulated during his captivity and give up future benefits.

Bergdahl is stationed at Fort Sam Houston in San Antonio, where he is working as a clerk.

(Reporting by Susan Heavey and David Alexander; Additional reporting by Jim Forsyth in San Antonio, Texas; Editing by Doina ChiacuBill Trott and Jonathan Oatis)

Global shares wilt, dollar nervous before Fed outcome; Apple outperforms

A cameraman films a stock quotation board at the Tokyo Stock Exchange in Tokyo December 15, 2014. REUTERS/Yuya Shino

Asian stock markets followed Wall Street into the red on Wednesday, while the dollar was on edge following speculation the Federal Reserve could take a dovish turn in its post-meeting statement later in the session.

Apple Inc (AAPL.O) provided some relief after the bell as record sales of its iPhone line helped it beat expectations, sending its stock up more than 5 percent, helping to lift U.S. stock futures ESc1 by 0.3 percent.

But earnings from other majors generally disappointed, with multinationals from DuPont <DD.N > to Microsoft Corp (MSFT.O) complaining that a strong U.S. dollar was hurting profits.

That left a soggy feel to Asian trade and Australia’s main index .AXJO eased 0.2 percent while the Nikkei .N225 dropped 0.1 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was off a slim 0.1 percent.

On Wall Street, the Dow .DJI ended with losses of 1.65 percent, while the S&P 500 .SPX fell 1.34 percent and the Nasdaq .IXIC 1.89 percent.

Nine of the 10 primary S&P 500 sectors fell, with tech .SPLRCT off 3.3 percent in its biggest one-day drop since November 2011. Shares in Microsoft slid more than 10 percent, while Caterpillar (CAT.N) shed 7 percent.

The latest U.S. economic news was mixed with durable goods orders surprisingly soft, but notable strength was seen in housing and consumer sentiment.

Soft business investment and corporate earnings stoked talk the Fed would have to acknowledge the more difficult environment in its policy statement at 1400 GMT.

Further fuelling such expectations, Singapore’s central bank unexpectedly eased policy ahead of its scheduled review, joining a growing list of central banks that took steps to counter disinflation and slowing growth.

So far, the U.S. central bank has stuck by plans to raise interest rates around the middle of 2015, but markets have relentlessly pushed out the timing to year-end and are plotting a much lower trajectory for future hikes.

Fed funds <0#FF:> imply a rate of only 45 basis points by December, compared to the current effective funds rate of 12 basis points.

“The market now thinks a rate hike around June is unlikely. So if the Fed does not change its tone, the market will take it as a bit more hawkish than expected,” said Tomoaki Shishido, fixed income analyst at Nomura Securities.

Just the risk of a dovish turn was enough to force speculators to cut back on crowded short positions in the euro, lifting the common currency to $1.1333 EUR= and away from Monday’s 11-year low of $1.1098.

The dollar dipped to 118.09 yen JPY= and retreated against a basket of major currencies to 94.089 .DXY, off an 11-year high of 95.481 hit on Friday.

In commodity markets, oil prices were pressured by news U.S. oil stockpiles surged by nearly 13 million barrels last week. [API/S]

Brent crude oil LCOc1 dipped to $49.02 a barrel while U.S. crude oil futures CLc1 slipped to $45.50.

(Editing by Shri Navaratnam and Eric Meijer)

 

 

Apple iPhone sales trample expectations as profit sets global record

 Apple Inc (AAPL.O) quarterly results smashed Wall Street expectations with record sales of big-screen iPhones in the holiday shopping season and a 70 percent rise in China sales, powering the company to the largest profit in corporate history.

The company sold 74.5 million iPhones in its fiscal first quarter ended Dec. 27, while many analysts had expected fewer than 70 million. Revenue rose to $74.6 billion from $57.6 billion a year earlier.

Profit of $18 billion was the biggest ever reported by a public company, worldwide, according to S&P analyst Howard Silverblatt. Apple’s cash pile is now $178 billion, enough to buy IBM (IBM.N) or the equivalent to $556 for every American.

Apple Chief Executive Officer Tim Cook said the Cupertino, California-based company would release its next product, the Apple Watch, in April.

Shares rose about 5 percent to $114.90 in after-hours trade.

Daniel Morgan, senior portfolio manager at Apple-shareholder Synovus Trust Company in Atlanta, Georgia, said that the report was a good sign in a quarter where big tech companies such as IBM and Microsoft Corp (MSFT.O) have disappointed.

Apple Chief Financial Officer Luca Maestri told Reuters in an interview that the company did not sell more iPhones in China than the United States, despite some earlier predictions by research analysts.

But the big-screen iPhone 6 and 6 plus drove revenues in China were up 70 percent in the quarter from a year earlier. The company’s success in the competitive Chinese market can be attributed to its partnership with China Mobile Ltd (0941.HK), the largest global mobile carrier, and the appeal of the larger screen size of the iPhone 6 and 6 Plus.

Maestri said he does not expect Apple to struggle because of China’s slipping economic growth. “We haven’t seen a slowdown,” he added.

Maestri also said the company doubled iPhone sales in Singapore and Brazil.

Apple will reach 40 company stores in greater China by mid-2016, Maestri told analysts on a conference call.

Carolina Milanesi, an analyst with Kantar Worldpanel ComTech, also lauded a 14 percent rise in unit sales of Apple Macintosh computers and sales of older iPhone models.

Apple was well positioned for the current quarter in China, she added, which will include the Chinese New Year holiday and reflect Apple’s attempts to sell through new channels.

Apple reported net profit of $18.02 billion, or $3.06 per diluted share, compared with $13.07 billion, or $2.07 per share, a year earlier. That topped expectations of $2.60 per share, according to Thomson Reuters I/B/E/S. Analysts had expected revenue of $67.69 billion.

Maestri said that Apple faced “a clear headwind” from the strong dollar but that it had included the challenge in its forecasts. Apple predicted revenue of $52 billion to $55 billion in its fiscal second quarter, compared with Wall Street’s average target of $53.79 billion.

Cook said that the company’s new mobile payment service, Apple Pay, which lets customer buy products from select merchants with their phones, was in its “first inning” and the company would consider adding new features as it looked at expanding outside the United States.

(Reporting by Christina Farr in San Francisco; Additional reporting by Supantha Mukherjee in Bengaluru and Caroline Valetkevitch in New York; Editing by Peter HendersonTed Kerrand Lisa Shumaker)

Shots fired near Vice President Biden’s Delaware residence

Vice President Joe Biden and Dr. Jill Biden smile onstage while speaking about community college education during a visit to Pellissippi State College in Knoxville, Tennessee January 9, 2015.  REUTERS/Kevin Lamarque

(Reuters) – Gun shots rang out from a passing vehicle near U.S. Vice President Joe Biden’s residence in Delaware on Saturday night, but the vice president and his wife were not at home, the U.S. Secret Service said on Sunday.

The shots were fired on a public road several hundred yards from the house, outside a security perimeter, at about 8:25 p.m. EST. Secret Service personnel at the residence heard the reports and saw the vehicle speeding away.

Biden and his wife, Jill, were in Delaware when the shooting occurred but were out for the evening, the Secret Service said. The home, near Wilmington, is not visible from the road, and it was not clear whether the gunfire was random or aimed in the direction of the residence.

The incident occurred as the Secret Service tries to recover from a series of security lapses, including an incident in September when a knife-carrying man jumped the White House fence and ran into the president’s official residence.

Biden, 72, who served as a U.S. senator from Delaware for more than three decades, has residences in New Castle County and in Washington, D.C.

The Bidens, and President Barack Obama, were briefed about the incident on Saturday night.

Officials declined to discuss the Bidens’ location on Sunday for security reasons.

Authorities said they would search the area to determine whether the Biden home or other nearby residences were hit by bullets.

About half an hour after the shooting, local police arrested an individual in a vehicle that attempted to pass an officer who was securing the area. The individual is not currently tied to the incident but the Secret Service said the person would be questioned about the shooting.

The Secret Service is charged with protecting the president and vice president. The agency announced last week it would remove four senior officials from their jobs and retire a fifth, as part of a shake-up intended to address problems in the organization.

(Reporting by David MorganBill Trott and David Bailey; Editing by David Goodman and Nick Zieminski)

 

Oil prices dip on gloomy Chinese, European outlook

A man fills up his car at a petrol station in Rome January 6, 2015. REUTERS/Max Rossi

(Reuters) – Oil prices fell in early Asian trade on Monday, with markets expecting gloomy Chinese economic data to be published this week.

Chinese new home prices fell an average 4.3 percent year-on-year in 68 of the 70 major cities monitored. That was an appetizer to Tuesday’s report on gross domestic product which is expected to show China’s annual growth slowed to 7.2 percent in the last quarter, meaning full-year growth would undershoot Beijing’s 7.5-percent target and would be the weakest in 24 years.

In Europe, the main event of the week will be Thursday’s meeting of the European Central Bank (ECB), which is considered almost certain to see the launch of a government bond-buying campaign, pointing to further euro falls against the dollar as well as to downward pressure on oil prices.

“Commodity markets to be driven by currency markets and expectations of ECB quantitative easing this week,” ANZ bank said in a note on Monday.

Benchmark Brent crude futures were trading at $49.75 per barrel at 0225 GMT, down 42 cents since their last settlement. U.S. crude was trading down 37 cents at $48.32 a barrel.

Oil prices have dropped by more than half since last June as production around the world has soared while demand slows. Although the International Energy Agency (IEA) said that a reversal in trend was possible this year, it added that prices may fall further before the market begins to rise again.

Analysts said that prices would likely rise away from levels below $50 per barrel, but many noted that the longer-term outlook was for oil prices to remain at lower levels than in recent years.

“We do not subscribe to the theory of US$20/bbl (barrel) oil. The price may go down to the US$30/bbl level for a short while, but it will bounce back,” research firm Facts Global Energy (FGE) said in its January note to clients.

“We will be in the US$60-80/bbl price range till end of the decade,” it added.

U.S. markets will be shut on Monday for a public holiday.

(Editing by Joseph Radford)

 

Obama tax proposals run into Republican criticism

The U.S. Capitol building is seen through a snow covered trellis at the start of the 114th Congress on the Capitol grounds in Washington January 6, 2015. REUTERS/Jim Bourg

President Barack Obama’s new tax plan ran into rapid criticism from the Republicans on Sunday, underscoring the challenges facing any attempt to overhaul the U.S. tax code.

With the start of a new Congress this month under Republican control, lawmakers have been discussing tax reform. However, with Congress deeply divided on fiscal policy, Obama’s latest tax plan is likely to hit strong opposition.

Unable to compromise over taxes and spending, Washington has not thoroughly revamped the code in 28 years, although it is commonly acknowledged that the tax code is riddled with loopholes and does not raise enough revenue to pay the country’s bills.

The U.S. economy is growing again and last year added jobs at the fastest clip since 1999. While the government still borrows to meet its budget, the deficit has declined sharply.

Ahead of Obama’s State of the Union address on Tuesday, senior administration officials said on Saturday the Democrat president will call for new taxes on the wealthy and on Wall Street banks, both Republican constituencies.

Obama proposes raising the top tax on capital gains to 28 percent from 23.8 percent, while also shutting down a loophole that lets the heirs of large estates avoid paying the full capital gains tax on assets they inherit.

He also proposes imposing a fee on the liabilities of the nation’s largest roughly 100 financial firms.

“The president needs to stop listening to his liberal allies who want to raise taxes at all costs and start working with Congress to fix our broken tax code,” said Republican Senator Orrin Hatch, the Senate’s top tax law writer.

Obama’s proposals would slap tax hikes on “small businesses, savers, and investors,” Hatch said in a statement.

Congressional Republicans are circulating plans to cut taxes on businesses by, for instance, repealing a tax on medical device manufacturers that was imposed under Obama. Another Republican plan would cut the overall tax rate on businesses.

Obama will also propose a handful of tax measures to help middle-class families with costs for college and child care, as well as new retirement savings options.

“The president’s tax proposals focus right where we need to - creating opportunity for middle class families,” said Sander Levin, the top Democratic tax writer in the House of Representatives, in a statement.

Under Obama, taxes have already been raised on the wealthy and the economy has recovered from the 2008 financial crisis.

Effective in 2013, there was an increase to 20 percent from 15 percent in the capital gains tax for high-earners. Obama’s Affordable Healthcare Act imposed an additional 3.8 percent tax on investment income for households making $250,000 and up.

The ACA law also added a 0.9 percent tax on ordinary income for high earners. In addition, the top tax bracket for ordinary wage income went up to 39.6 percent, from 35 percent, for individuals making $400,000 and couples earning $450,000.

Republican Representative Jason Chaffetz called Obama’s new plan “a non-starter.”

“Are you going to actually grow the economy and jobs, are entrepreneurs going to be better off, are small businessmen going to be better off, with more taxes and more government? No!” he told CNN’s “State of the Union” show.

(Additional reporting by David Morgan and Bill Trott; Editing by Frances Kerry and Clelia Oziel)

 

Ukrainian troops retake most of Donetsk airport from rebels

An aerial footage shot by a drone shows a multi-storey control tower of the Sergey Prokofiev International Airport damaged by shelling during fighting between pro-Russian separatists and Ukrainian government forces, in Donetsk, eastern Ukraine, seen in this still image taken from a January 15, 2015 handout video by Army. REUTERS-Army.SOS-Handout via Reuters

(Reuters) – Ukrainian troops recaptured almost all the territory of Donetsk airport in eastern Ukraine they had lost to separatists in recent weeks, as thousands gathered in Kiev for a state-sponsored peace march on Sunday.

The offensive brought fighting close to the industrial city of Donetsk, centre of a pro-Russian rebellion, while shelling intensified in other parts of the region known as “Donbass”.

With attempts to restart peace talks stalled, pro-Russian rebels have stepped up attacks in the past week and casualties have mounted, including 13 civilians killed in an attack on a passenger bus, which Kiev blamed on the separatists.

Military spokesman Andriy Lysenko said the army’s operation had returned battle lines near the airport to the previous status quo and thus not violated the 12-point peace plan agreed with Russia and separatist leaders last September in Minsk.

“We succeeded in almost completely cleansing the territory of the airport, which belongs to the territory of Ukrainian forces as marked by military separation lines,” he said.

Kremlin spokesman Dmitry Peskov said Moscow was concerned by what he called an escalation by Ukrainian forces that did not contribute to peace efforts.

He later said Ukrainian President Petro Poroshenko had rejected a peace plan contained in a letter Russian President Vladimir Putin sent him on Thursday.

“In recent days, Russia has consistently undertaken efforts as an intermediary in regulating the conflict,” Peskov said, according to the ITAR TASS news agency.

It said Putin’s letter included a concrete plan for both sides to withdraw heavy artillery.

Russian television channel NTV published the letter on Sunday evening. In it, Putin proposed “urgent measures for the cessation of mutual shelling, and also the rapid withdrawal by the sides in the conflict of means of destruction with a calibre higher than 100 mm”.

A Poroshenko spokesman said the Ukrainian president would not comment on the letter this evening.

OTHER VIOLENCE

Elsewhere in the region, the Ukrainian Interior Ministry said two brothers aged 7 and 16 had been killed and their 8-year-old sister injured when a shell struck a house in the government-controlled town of Vuhlehirsk, 60 km (40 miles) from Donetsk.

Spokesman Vyacheslav Abroskin said the shelling had come from the direction of Yenakiieve, controlled by the rebels.

Ukrainian President Petro Poroshenko addressed several thousand people in Kiev late Sunday at a peace march in memory of those killed on the passenger bus.

“We will not give away one scrap of Ukrainian land. We will get back the Donbass … and show that a very important aspect of our victory is our unity,” he said.

Rebel leader Alexander Zakharchenko blamed the shelling around Donetsk on the Ukrainian army. “We’re talking about Kiev trying to unleash war again,” Interfax quoted him as saying.

A ceasefire agreed in Minsk in early September has been regularly violated since the start by both sides, and fighting has flared up again since plans for peace talks last week were abandoned.

DONETSK FIGHTING

In Donetsk, a coal-and-steel city with a pre-war population of almost a million, residents reported a sharp upturn in fighting.

“It was impossible to sleep – explosions, the walls were shaking. It seemed like they were firing from near the building … The DNR (rebel) army were firing from our district,” 53-year-old advertising executive Alla said by telephone.

Forty-year-old plumber Andrey Tkachenko, who lives in the southern part of Donetsk, said the shelling had become noticeably worse in the past 24 hours.

“By now we can tell from the sound what’s flying. We’re used to the GRAD missiles, but now something heavier is firing all night and all day,” he said.

The World Health Organisation says more than 4,800 people have been killed in the conflict.

Despite what Kiev and the West says is incontrovertible proof, Russia denies its troops are involved or that it is funnelling military equipment to the separatists.

With its runways pitted and cratered, Donetsk airport has long since ceased to function.

But its control tower and extensive outbuildings, battered by shelling and gunfire, have taken on symbolic value, with government soldiers and separatists hunting each other, often at close range, in a deadly cat-and-mouse game among the ruins.

(Additional reporting by Jason Bush and Pavel Polityuk; Writing by Alessandra Prentice; Editing by Richard Balmforth and Tom Heneghan)

Oil prices hit fresh five-and-a-half-year lows; Brent below $56

An man refuels a vehicle next to a pricing quotation board at a petrol station in Tokyo December 17, 2014. REUTERS/Issei Kato

(Reuters) – U.S. crude and Brent futures dropped to fresh 5-1/2-year lows on Monday as worries about a surplus of global supplies amid weak demand continued to drag on oil markets.

OPEC’s decision in November to maintain output had earlier accelerated oil’s losses, while record-high Russian production and the highest Iraqi exports since 1980 added to the concerns about oversupply. The two oil benchmarks, Brent and West Texas Intermediate, have now lost more than half of their value from peaks hit in mid-2014.

U.S. crude CLc1 slid as low as $51.40 a barrel on Monday, its lowest since May 2009, and at 0535 GMT was at $51.60 a barrel, still down $1.09.

February Brent crude LCOc1 dropped as low as $55.36 a barrel, also its lowest since May 2009, before edging back to $55.51, down 91 cents.

Lacklustre economic data from the United States on Friday fuelled worries about the state of the global economy and the strength of oil demand.

“Oil demand is unlikely be robust this year when we look at the state of economies in China, Japan and Europe,” said Yusuke Seta, a commodity sales manager at Newedge Japan.

A weak euro may also have contributed to further oil losses as it reduces the purchasing power of euro holders for dollar-denominated oil.

“Theoretically speaking, a weaker euro puts downward pressure on Brent, although quantitative easing in the euro zone could possibly put more liquidity in the region, which may subsequently flow into Brent,” Seta said.

Ample supply and slowing demand could push Brent into a $50-$55 range, possibly during the first quarter of 2015, said a crude oil trader who declined to be named due to company policy, with WTI about $4 lower.

Conflicts in Libya has reduced the OPEC producer’s crude output to around 380,000 barrels a day, state-run National Oil Corp (NOC) has said.

Fighting was reported near the country’s biggest oil export port Es Sider in the east even as a week-long fire at the port’s storage tanks was extinguished on Friday.

(Editing by Tom Hogue)

 

Hundreds of police turn backs on NYC mayor at slain officer’s funeral

Law enforcement officers stand, with some turning their backs, as New York City Mayor Bill de Blasio speaks on a monitor outside the funeral for NYPD officer Wenjian Liu in the Brooklyn borough of New York January 4, 2015.  REUTERS/Shannon Stapleton

(Reuters) – New York City police turned out in their thousands on Sunday for the funeral of the second of two officers murdered last month, but in a sign of persistent tensions with Mayor Bill de Blasio, hundreds turned their backs when he delivered his eulogy.

Politicians, police leaders and other mourners joined family members inside a Brooklyn funeral home to honor Wenjian Liu, who was killed in an ambush that led to accusations the mayor had contributed to an anti-police climate.

Outside, the throng of officers gathered to pay their respects to Liu stretched for nearly a mile along an avenue in the borough’s Bensonhurst neighborhood. When de Blasio began his speech, hundreds of them turned their backs to screens showing his image, despite earlier entreaties by City Police Commissioner Bill Bratton to mourners to show restraint.

The back-turning gesture has become symbolic of the anger many officers feel for de Blasio over what they see as his failure to support them during a wave of anti-police protests.

De Blasio used the eulogy to call for reconciliation and after a wrenching year for the city.

“New York has been from its earliest days a most tolerant of cities … but there have always been times when that harmony has been challenged,” de Blasio said at Liu’s funeral, one of the largest in NYPD history.

“Let us rededicate ourselves to those great New York traditions of mutual understanding and living in harmony.”

Liu, 32, and Rafael Ramos, 40, were ambushed and fatally shot on Dec. 20 by a killer who said he wanted to avenge the deaths of two unarmed black men this summer in encounters with white officers in Ferguson, Missouri, and New York City.

Those deaths, and decisions by grand juries in November and December to return no charges against the police officers involved, triggered weeks of protests around the country against police treatment of African Americans and other minorities.

The crowd that turned out to honor Liu, believed to be the New York Police Department’s first Chinese-American officer killed in the line of duty, appeared nearly equal to the estimated 25,000 who came to Ramos’ funeral.

Liu’s wife paid a tearful tribute to the officer as a devoted husband and son. “Wenjian is my hero,” said Pei Xia Chen. “We can always count on him.”

Later, as pall bearers carried the casket draped in the NYPD flag to the hearse, helicopters flew at low altitude over mourners in a maneuver known as a “missing man formation,” an NYPD tradition.

SILENT PROTESTS AGAINST THE MAYOR

To be sure, a majority of the officers outside the funeral home faced toward de Blasio when he spoke, especially in the front ranks. But further down the avenue, hundreds were seen turning away, much like at last week’s services for Ramos.

After the ceremony, Patrick Lynch, the head of the largest police union, said officers were going through a difficult, emotional time.

“They feel that City Hall has turned their back on them and they have a right to have their opinion heard and they did it respectfully in the street, not inside the church,” said Lynch.

The union leader had said immediately after the ambush on Liu and Ramos that the mayor had contributed to the political climate that led to their deaths.

De Blasio offered qualified support for protesters after the grand jury decision not to charge the officer involved in the chokehold death of Eric Garner in New York. The mayor said he had talked to his bi-racial son, Dante, about being wary in dealing with police.

Relations between the police and de Blasio had begun to fray before that. During his 2013 campaign for office, the mayor criticized some NYPD tactics, including a “stop-and-frisk” policy that critics said was used to harass African-Americans and other minority groups.

Many of the tens of thousands of mourners crowded along the sidewalk outside Sunday’s services were Asian.

Caiyao Chen, 32, who emigrated from China in 2000, said he didn’t know the slain officer but he said he was particularly saddened because Liu was his parents’ only son.

“In Chinese tradition, the son carries the blood of the family,” he said. “The family is broken now.”

(Writing by Frank McGurty; Editing by Larry King, Eric Walsh and Frances Kerry)

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Putin blames ‘external factors’ for Russia’s economic crisis

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MOSCOW — Russian President Vladimir Putin addressed his nation Thursday amid the worst economic crisis of his 15-year reign. He blamed “external factors” for the current woes and said recovery is two years away “at most.”

Putin faced his public amid a plunging oil price, sanctions from the West over his actions in Ukraine and a ruble currency that has lost more than half of its value in recent months. As the news conference took place — it was expected to last up to four hours — the ruble added about 1% against the dollar.

“Our economy will overcome the current situation. How much time will be needed for that? Under the most unfavorable circumstances I think it will take about two years,” Putin said.

An Associated Press-NORC Center for Public Affairs Research poll released Thursday found that about 80% of Russians still support the president despite slipping confidence in the economy.

Ahead of the speech, Russian tycoon Vladimir Yevtushenkov was released from house arrest in a move that echoed his freeing of Mikhail Khodorkovsky.

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Senate passes $1.1 trillion spending bill

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WASHINGTON — The Senate on Saturday approved a $1.1 trillion spending bill and sent it to President Obama for his signature.

The 56-40 vote on the long-term funding bill was the main item left on Congress’ year-end agenda. The measure provides money for nearly the entire government through the Sept. 30 end of the current budget year.

The sole exception is the Department of Homeland Security, which is funded only until Feb. 27. Republicans intend to try then to force the president to roll back a new immigration policy that removes the threat of deportation from millions of immigrants living in the country illegally.

Some Senate Democrats and Republicans opposed the measure because of provisions that would ease Wall Street regulations and campaign finance laws. Obama has said he supports the bill.

On Friday, conservative Republicans, including Sen. Ted Cruz of Texas, blocked efforts to prevent a weekend session in the Senate. Cruz and other conservatives have complained about Obama’s immigration executive order and want to use the spending bill to defund efforts to implement it.

In an exchange on the Senate floor Saturday, Senate Majority Leader Harry Reid of Nevada and Democratic Majority Whip Sen. Richard Durbin of Illinois blamed the delay on Cruz.

Durbin asked whether Cruz was also the senator who shut down the government last year in protest over the Affordable Care Act.

“The very same man,” Reid replied. “Now he’s hung up not only on the Affordable Care Act, but the president’s action to give 5 million people relief in this country so that they can come out of the shadows and make our country a more productive place.”

Cruz, a potential presidential candidate in 2016, said Reid was “going to an embarrassing length to tie up the floor to obstruct debate and a vote on this issue because he knows amnesty is unpopular with the American people, and he doesn’t want the Democrats on the record as supporting it.”

The Saturday session began at noon, and senators spent much of the day considering a slew of nominees for judicial and administration posts.

The compromise bill had faced opposition from Democratic liberals upset about the repeal of a banking regulation and Republican conservatives unhappy that it failed to challenge Obama’s immigration moves.

The Senate — which convened in a rare weekend session — passed a temporary spending bill earlier Saturday, funding the government through Wednesday and giving legislators more time to consider the $1.1 trillion measure.

The House narrowly approved the funding bill by a 219-206 vote Thursday, hours before government funding was set to run out.

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Three Social Security mistakes you should avoid

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Social Security plays an important role in Americans’ retirement plans. For the most part, Social Security offers a fairly straightforward proposition: Money is taken out of your paycheck while you work, then when you retire, you file and collect benefits.

Still, there are three key mistakes to avoid if you want to make the most out of the federal program. They are: Signing up when you’re below full retirement age and still working, expecting more than what the program will actually deliver, and worrying too much over whether your benefits will be taxed.

WHY THESE ARE BIG MISTAKES

Collecting early while still working: Collecting Social Security while below your full retirement age (somewhere between ages 65 and 67, depending on when you were born) permanently reduces your benefit. On top of that, there is a penalty of $1 from your Social Security check for every $2 of earnings you have above $15,480 in 2014 if you are below your full retirement age for the full year.

If you work while collecting benefits under full retirement age, Social Security will eventually adjust for the money it withheld due to that penalty. Still, that cash comes later — after you retire or reach full retirement age. That delay in payment (combined with the lowered benefit levels from collecting early) largely defeats the purpose of signing up for benefits early in the first place.

Expecting more than the program will actually deliver: Social Security expects the average monthly benefit to a retiree will be $1,328 in January 2015. It also calculates that the maximum benefit to a person retiring at full retirement age in 2015 will be $2,663 per month. Your own benefit depends on your earnings record and the age at which you start collecting, but on average it will likely be about 40% of your pre-retirement income.

If you expect to retire to a modest lifestyle in a low-cost part of the country, that might be enough. If you want more out of life, you need a sufficient nest egg to make up the difference. That takes planning. Investing takes time, typically measured in decades, to build a decent sized portfolio. The sooner you realize what Social Security will provide and prepare accordingly, the easier it will be to build a plan to cover what it won’t.

Worrying too much about taxes on benefits: It’s true that if your income is high enough, up to 85% of your Social Security benefits might be subject to income tax. Still, having a higher income means more money in your pocket to support your retirement lifestyle. Taxes are certainly a drag on your ability to spend, but you’re still better off with a higher total income after taxes than having a smaller income just to avoid taxes on part of it.

IT’S YOUR RETIREMENT — ENJOY IT

Your Social Security benefit can play an important part in your retirement plan. If you avoid these three mistakes and treat Social Security as the supplemental income it was designed to be, you can improve your chances of having the retirement you’re hoping for.

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