Obama moves on taxes in latest "cliff" counter-proposal

President Obama gave up Monday on his demand for higher taxes on households earning $250,000 and upped it to $400,000 while embracing smaller cost-of-living Social Security raises in a counter-proposal to House Speaker John Boehner meant to narrow differences and forge a pre-Christmas "fiscal cliff" deal.

Mr. Obama and Boehner met for nearly an hour in the Oval Office on Monday and sources familiar with the talks released specific details of the White House proposal.

Boehner aides said it brought the two sides closer but said a deal was not at hand.

"Any movement away from the unrealistic offers the President has made previously is a step in the right direction, but a proposal that includes $1.3 trillion in revenue for only $930 billion in spending cuts cannot be considered balanced," said Brendan Buck, a Boehner spokesman.

Other senior Republican aides told reporters on Capitol Hill they are not rejecting the latest White House offer, but they also said that there is not parity or balance in the White House plan and substantive issues remain unresolved. One senior aide said the issues that they are talking about are not technically difficult to resolve, but they were wary the differences might be fundamental issues that are difficult to resolve.

But the depth, specificity and fine-grain nature of discussions over policy, tax revenue and spending cuts belied the tough rhetoric from the two sides in the negotiation. Signs point to a deal before the New Year's fiscal cliff deadline -- and possibly an announcement as early as Wednesday.

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Boehner's "fiscal cliff" offer brings optimism to Capitol Hill

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Boehner's "fiscal cliff" concessions come with a price

Talks picked up genuine momentum on Friday when Boehner agreed to higher income tax rates on households earning $1 million and above. Previously, Boehner opposed all income tax increases. He also gave in on raising the debt ceiling, a vote some Republicans wanted to use as leverage against Obama in 2013. Both gestures, top White House aides said, broke the logjam.

Mr. Obama responded with big concessions of his own on Monday. He offered a $400,000 income threshold for a Clinton-era top tax bracket of 39.6 percent. Boehner had proposed that tax rate for millionaires and a total 10-year tax revenue figure of $1 trillion. Obama wants $1.2 trillion in new revenue. Both sides look for hundreds of billions in new revenue in 2013 through a tax reform process that eliminates some tax deduction and closes loopholes.

The president also wants a two-year ceasefire on raising the debt ceiling. Boehner offered one year.

In addition to disagreement on income levels for tax rates or some other way to get more revenue, the two sides have not set in stone an actual tax reform process. It sounds like they are talking about creating a new sequester-like mechanism in 2014 as incentive for both tax reform and entitlement reforms.

Speaking of entitlements, Boehner also asked the White House to increase the eligibility age for Medicare but Mr. Obama again refused. This difference could loom large as Republicans want structural cost-saving changes in Medicare in exchange for raising income tax rates.

Mr. Obama has given ground on cost-of-living adjustments to Social Security and other federal benefits, but is trying to shield Medicare. Democrats have warned Obama they might bolt if he folds on raising Medicare's eligibility age. They have been less emphatic about cost-of-living adjustments.

Other components of the president's counter-proposal include:

• $1.2 trillion in new income tax revenue with a 39.6 percent (up from 35 percent) on income of $400,000 or more.
• $1.2 trillion in spending cuts divided this way: $800 billion in cuts; $290 billion in interest savings due to lower deficits; $130 billion in cost-of-living adjustments - - with specific protections to preserve increases for economically disadvantaged beneficiaries. Because changing cost-of-living adjustments would also affect where people fell in various tax brackets, this move would raise $90 billion
• The $800 billion in cuts would come from $400 billion in savings to health care entitlements like Medicare and Medicaid; $200 billion in better tax revenue collection, increased financial transaction fees and reduced federal employee benefits.
• $200 billion in domestic discretionary -- annual spending on basic government functions - divided equally between defense and non-defense programs.
• At least $50 billion devoted next year to infrastructure spending and more in latter years - figures still subject to negotiation.
• A one-year extension of unemployment insurance benefits.

Both sides have already agreed to create long-term solutions for the annual ritual of adjusting the Alternative Minimum Tax, the reimbursement formulas for Medicare physicians and a grab-bag of pro-business tax breaks.

Obama also did not ask for an extension of the temporary 2 percent payroll tax - a priority for some Democrats.

Funding for Superstorm Sandy will be handled separately from the emerging fiscal cliff package. The Senate is considering the administration's $60.4 billion request and the White House expects swift, bipartisan approval.

CBS News Capitol Hill producer Jill Jackson contributed to this report.

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Conn. Kids Laid to Rest: 'Our Hearts Are With You'

Visibly shaken attendees exiting the funeral today for 6-year-old Noah Pozner, one of 20 children killed in the Connecticut school massacre last week, said they were touched by a story that summed up the first-grader best.

His mother, Veronique, would often tell him how much she loved him and he'd respond: "Not as much as I [love] you," said a New York man who attended the funeral but was not a member of the family.

Noah's family had been scheduled to greet the public before the funeral service began at 1 p.m. at the Abraham L. Green & Son Funeral Home in Fairfield, Conn. The burial was to follow at the B'nai Israel Cemetery in Monroe, Conn. Those present said they were in awe at the composure of Noah's mother.

Rabbi Edgar Gluck, who attended the service, said the first person to speak was Noah's mother, who told mourners that her son's ambition when he grew up was to be either a director of a plant that makes tacos -- because that was his favorite food -- or to be a doctor.

Outside the funeral home, a small memorial lay with a sign reading: "Our hearts are with you, Noah." A red rose was also left behind along with two teddy bears with white flowers and a blue toy car with a note saying "Noah, rest in peace."

CLICK HERE for complete coverage of the tragedy at Sandy Hook.

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The funeral home was adorned with white balloons as members of the surrounding communities came also to pay their respects, which included a rabbi from Bridgeport. More than a dozen police officers were at the front of the funeral home, and an ambulance was on standby at a gas station at the corner.

U.S. Sen. Richard Blumenthal, U.S. Rep. and Sen.-Elect Chris Murphy and Gov. Dannel P. Malloy, all of Connecticut, were in attendance, the Connecticut Post reported.

Noah was an inquisitive boy who liked to figure out how things worked mechanically, The Associated Press reported. His twin sister, Arielle, was one of the students who survived when her teacher hid her class in the bathroom during the attack.

CLICK HERE for a tribute to the shooting victims.

The twins celebrated their sixth birthday last month. Noah's uncle Alexis Haller told the AP that he was "smart as a whip," gentle but with a rambunctious streak. He called his twin sister his best friend.

"They were always playing together, they loved to do things together," Haller said.

The funeral for Jack Pinto, 6, was also held today, at the Honan Funeral Home in Newtown. He was to be buried at Newtown Village Cemetery.

Jack's family said he loved football, skiing, wrestling and reading, and he also loved his school. Friends from his wrestling team attended his funeral today in their uniforms. One mourner said the message during the service was: "You're secure now. The worst is over."

Family members say they are not dwelling on his death, but instead on the gift of his life that they will cherish.

The family released a statement, saying, Jack was an "inspiration to all those who knew him."

"He had a wide smile that would simply light up the room and while we are all uncertain as to how we will ever cope without him, we choose to remember and celebrate his life," the statement said. "Not dwelling on the loss but instead on the gift that we were given and will forever cherish in our hearts forever."

Jack and Noah were two of 20 children killed Friday morning at Sandy Hook Elementary School in Newtown, Conn., when 20-year-old Adam Lanza sprayed two first-grade classrooms with bullets that also killed six adults.

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Japan's next PM Abe must deliver on economy, cope with China

TOKYO (Reuters) - Conservative ex-premier Shinzo Abe will get a second chance to lead Japan after his Liberal Democratic Party surged back to power in Sunday's election, but he must move swiftly to bolster a sagging economy and manage strained ties with China to avoid the fate of his short-lived predecessors.

Abe, whose party won by a landslide just three years after a crushing defeat, is due to meet the leader of its small ally on Monday to cement their alliance and confirm economic steps to boost an economy now in its fourth recession since 2000.

The victory by the LDP, which had ruled Japan for most of the past 50 years before it was ousted in 2009, will usher in a government pledged to a tough stance in a territorial row with China, a pro-nuclear energy policy despite the 2011 Fukushima disaster and a potentially risky recipe for hyper-easy monetary policy and big fiscal spending to boost growth.

Projections by TV broadcasters showed that the LDP had won at least 294 seats in the 480-member lower house, while its ally the New Komeito party took 31 seats.

That gives them a two-thirds majority needed to overrule parliament's upper house in most matters. Since 2007, successive governments have been hamstrung by a "twisted parliament" where ruling coalitions lacked control over the upper house, which could block most legislation.

While investors have already pushed the yen lower and share prices higher in anticipation of an LDP victory and Abe's economic stimulus, the "super majority" drove the yen to a 20-month low against the U.S. dollar as far as 84.48.

Japan's benchmark Nikkei opened up 1.6 pct on Monday, hitting a high of more than eight months.

Prime Minister Yoshihiko Noda's Democratic Party of Japan (DPJ) was crushed. It was forecast to win 57 seats -- less than a fifth of its showing in 2009, when it swept to power promising to pay more heed to consumers than companies and pry control of policies from bureaucrats.

But voters felt the DPJ failed to live up to those pledges and the party was hit by defections before the vote due to Noda's unpopular plan to raise the sales tax to curb public debt, which is already more than twice the size of the economy.

"This was an overwhelming rejection of the DPJ," said Gerry Curtis, a professor at New York's Columbia University. That sentiment was echoed in Japanese media.

"In a word, rather than a huge victory for the LDP, this election was a massive defeat for the Democrats," the Nikkei business daily said in an editorial.

Analyst Bruce Klingner of the Heritage Foundation think tank in Washington agreed, but said it "also reflects an embrace of conservative views" after strained relations with Japan's neighbors in recent years.

"Chinese assertiveness and North Korean provocations nudged the public from its usual post-war complacency toward a new desire to stand up for Japanese sovereignty," he said.

However, that did not mean the Japanese were embracing a return to militarism, added Klingner, a former CIA analyst.

LOW TURNOUT

Abe, expected to be voted in by parliament on December 26, will also have to prove he has learned from the mistakes of his first administration, plagued by scandals and charges of incompetence.

Voter distaste for both major parties has spawned a clutch of new parties, including the Japan Restoration Party founded by popular Osaka Mayor Toru Hashimoto, which took 54 seats according to media projections.

Media estimates also showed turnout at around 59 percent, which could match the previous post-war low.

LDP leader Abe, 58, who quit as premier in 2007 citing ill health, has been talking tough in a row with China over uninhabited isles in the East China Sea, although some experts say he may temper his hard line with pragmatism once in office.

The soft-spoken grandson of a prime minister, who will become Japan's seventh premier in six years, Abe also wants to loosen the limits of a 1947 pacifist constitution on the military so Japan can play a bigger global security role.

President Barack Obama congratulated Abe and underlined U.S. interest in working with the longstanding American ally.

"The U.S-Japan Alliance serves as the cornerstone of peace and prosperity in the Asia-Pacific and I look forward to working closely with the next government and the people of Japan," he said in a statement.

Abe, who visited China first during his first term, said he would start off this time by going to Washington.

The LDP, which promoted nuclear energy during its decades-long reign, is expected to be friendly to power utilities, although deep public concerns remain over safety.

Abe has called for "unlimited" monetary easing and big spending on public works to rescue the economy. Such policies, a centerpiece of the LDP's platform for decades, have been criticized by many as wasteful pork-barrel politics.

Jiji news agency said previous LDP Prime Minister Taro Aso, 72, could be tapped as finance minister and deputy premier. He launched massive economic stimulus packages to fight the impact of the 2008-2009 global financial crisis but was dogged by policy flipflops and gaffes.

Many economists say that prescription for "Abenomics" could create temporary growth that would allow the government to proceed with a planned initial sales tax rise in 2014 to help curb public debt.

But it looks unlikely to cure deeper ills or bring sustainable growth to Japan's ageing society, and risks triggering a market backlash if investors decide Japan has lost control of its finances.

(Editing by Tomasz Janowski and Paul Tait)

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Karena Lam pregnant again

HONG KONG: Hong Kong actress Karena Lam revealed Saturday during a publicity event that she is pregnant with her second child, reported Hong Kong media.

The actress, who is married to advertisement director Steve Yuen, gave birth to their first, daughter Kayla, in 2010.

Lam expressed that she has asked actor Ekin Cheng, who was also at the event, to be her unborn child's godfather.

"We are discussing whether I can be the child's godfather, but we'll have to ask her husband first," said Cheng, adding that he hoped it will be a boy, and would teach the child martial arts if it turns out to be a boy.

"If it's a boy, I hope he is not as naughty as you," Lam quipped.

Cheng appeared very happy for his old friend, and posed like a pregnant mother in a goofy photo with her, which she promptly put up on her micro blog.

-CNA/ha

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iPhone 5 sales in China surpass 2 million in first weekend

Apple's iPhone 5.

(Credit:
CNET)

It's been just three days since Apple's iPhone 5 launch in China and already 2 million devices have already been sold. The tech giant announced today that this latest model of its popular smartphone is selling faster than ever in the Far East country.

"Customer response to
iPhone 5 in China has been incredible, setting a new record with the best first weekend sales ever in China," Apple CEO Tim Cook said in a statement. "China is a very important market for us and customers there cannot wait to get their hands on Apple products."

The iPhone 5 went on sale on Thursday in China and even before people could get their hands on the smartphone, hundreds of thousands of online reservations were already made for the device. The device is available through carriers China Telecom and China Unicom and, as of now, it's still not being offered on China Mobile -- the country's largest carrier.

China is of huge significance for Apple, it is the company's second biggest market -- after the U.S. -- and already accounted for about 15 percent ($23.8 billion) of the company's revenue for its fiscal year that ended in September.

When the iPhone 5 first launched in the U.S. in September, its sales topped 5 million units over first weekend -- which was a million higher than the
iPhone 4S. According to analysts at investment bank Canaccord Genuity, it is expected that Apple will sell 47.5 million iPhones in the current quarter, up from its prior forecast for 45 million. However, estimates for the first quarter of 2013 have been slightly lowered -- now 46 million instead of 47.5 million -- as the earlier-than-expected China launch is most likely pulling sales into this quarter.

Besides China, the iPhone 5 will also be on sale in more than 100 other countries by the end of the month. According to Apple, this makes the iPhone 5 the fastest iPhone rollout ever.

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Newtown church evacuated after phone threat

NEWTOWN, Conn. Police say there's no danger at a Connecticut church following a phoned-in threat days after 20 children and six adults were massacred at a school.

Deborah Metz, a Trumbull police officer on the scene, gave the all-clear after an hour in which armed police in SWAT gear searched the St. Rose of Lima Roman Catholic Church and adjacent buildings.

The evacuation unnerved worshipers in the wake of the worst shooting of school-age children in U.S. history.

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Victims of Conn. school shooting

Brian Wallace, director of communications for Diocese of Bridgeport, said people were asked to leave shortly after the call came in during the homily.

To interrupt people trying to heal, Wallace said, is a very "tragic and difficult thing."

The St. Rose school, church and rectory were all searched. The police said they feel "very comfortable" that everything is secure.

Since Friday's shooting, the church has been open 24 hours for people to come and pray. Police say the church will be on lockdown for the rest of the day.

Wallace said the church should reopen tomorrow.

Shooter Adam Lanza, his mother and eight of the child victims attended St. Rose of Lima. It is a Roman Catholic Church with an adjacent school, which Lanza attended briefly.

It will be the site of funerals for eight of the murdered children, and possibly one of the teachers, sources told CBS News.

Anna Wood, who was inside the church, described the scene as "surreal" to CBS News.

Wood said she was from Oxford, Conn., but came to St. Rose because of the shooting, and said the church was packed, including children.

She said no one seemed scared as they left the church, and that one boy who asked why people were asked to leave was told they were in recess.

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Obama Offers Newtown 'Love and Prayers of a Nation'

President Barack Obama said at an interfaith prayer service in this mourning community this evening that the country is "left with some hard questions" if it is to curb a rising trend in gun violence, such as the shooting spree Friday at Newtown's Sandy Hook Elementary School.

After consoling victims' families in classrooms at Newtown High School, the president said he would do everything in his power to "engage" a dialogue with Americans, including law enforcement and mental health professionals, because "we can't tolerate this anymore. These tragedies must end. And to end them we must change."

Mandel Ngan/AFP/Getty Images

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Sandy Hook Elementary Shooting: Remembering the Victims Watch Video

The president was not specific about what he thought would be necessary and did not even use the word "gun" in his remarks, but his speech was widely perceived as prelude to a call for more regulations and restrictions on the availability of firearms.

The grieving small town hosted the memorial service this evening as the the nation pieces together the circumstances that led to a gunman taking 26 lives Friday at the community's Sandy Hook Elementary School, most first graders.

"Someone once described the joy and anxiety of parenthood as the equivalent of having your heart outside your body all of the time, walking around," he said, speaking of the joys and fears of raising children.

"So it comes as a shock at a certain point when you realize no matter how much you love these kids you can't do it by yourself," he continued. "That this job of protecting kids and teaching them well is something we can only do together, with the help of friends and neighbors, with the help of a community, and the help of a nation."

CLICK HERE for Full Coverage of the Tragedy at Sandy Hook

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Japan votes in election seen returning LDP to power

TOKYO (Reuters) - Japan voted on Sunday in an election expected to return the conservative Liberal Democratic Party (LDP) to power after a three-year hiatus, giving ex-Prime Minister Shinzo Abe a chance to push his hawkish security agenda and radical economic recipe.

Polls opened at 0700 a.m. (2200 GMT) and will close at 8 p.m. (1100 GMT), when major TV broadcasters will issue exit polls forecasting results.

An LDP win would usher in a government committed to a tough stance in a territorial row with China, a pro-nuclear power energy policy despite last year's Fukushima disaster and a potentially risky prescription for hyper-easy monetary policy and big fiscal spending to beat deflation and tame a strong yen.

Media surveys have forecast the LDP will win a big majority in parliament's powerful 480-seat lower house, just three years after a devastating defeat that ended more than 50 years of almost non-stop rule by the business-friendly party.

Together with a small ally, Abe's LDP could even gain the two-thirds majority needed to break through a policy deadlock that has plagued successive governments for half a decade.

Prime Minister Yoshihiko Noda's unpopular Democratic Party of Japan (DPJ), hit by a stream of defections, is likely to win fewer than 100 seats, less than a third of its tally in 2009. Voters feel the DPJ failed to deliver its 2009 election pledges.

"Whether it's relations with South Korea, problems with North Korea or trouble with China, on every front the Democratic Party's diplomacy has gone terribly," said Makoto Mizuno, a 58-year old company employee who was voting for Abe's party.

However, many voters remained undecided just days before the vote, the polls showed.

Voter distaste for both major parties has spawned a clutch of new parties including the right-leaning Japan Restoration Party founded by popular Osaka Mayor Toru Hashimoto.

Abe, 58, who quit abruptly as premier in 2007 after a troubled year in office, has been talking tough in a row with China over uninhabited isles in the East China Sea, although some experts say he may temper his hard line with pragmatism once in office.

The soft-spoken grandson of a prime minister, who would become Japan's seventh premier in six years, Abe also wants to loosen the limits of a 1947 pacifist constitution on the military, so Japan can play a bigger global security role.

The LDP, which promoted atomic energy during its decades-long reign, is expected to be friendly to nuclear utilities, although deep public safety concerns remain a barrier to business as usual for the industry.

A mother of two voting at a polling booth in Akasaka said she could not support the LDP because of their past stance on nuclear energy.

"I can't vote for a party that promoted nuclear power for decades. Politicians forget what happened last year (after the quake). I have children and I have to think about their future," said a 43-year old housewife who declined to give her name.

She said she was voting for the Tomorrow Party of Japan, which aims to shut down all nuclear reactors within 10 years, much earlier than the current government's goal to phase out the energy source by the 2030s.

ECONOMY IN DOLDRUMS

Abe has called for "unlimited" monetary easing and big spending on public works, to rescue the economy from its fourth recession since 2000. But such policies, a centrepiece of the LDP's platform for decades, have been criticized by many as wasteful pork barreling.

Many economists say that prescription for "Abenomics" could create temporary growth and enable the government to go ahead with a planned initial sales tax rise in 2014 to help curb a public debt now twice the size of gross domestic product.

But it looks unlikely to cure deeper ills or spark sustainable growth, and risks triggering a market backlash if investors decide Japan has lost control of its finances.

Japan's economy has been stuck in the doldrums for decades, its population ageing fast and big corporate brands faltering, making "Japan Inc" a synonym for decline.

Consumer electronics firms such as Sony Corp are struggling with competition from foreign rivals and burdened by a strong yen, which makes their products cost more overseas.

Noda's DPJ surged to power in a historic victory in 2009 promising to pay more heed to consumers than companies and put politicians, bureaucrats, in charge of policymaking.

Many voters now feel the DPJ failed to meet its election pledges as it struggled to govern and cope with last year's huge earthquake, tsunami and nuclear disaster, and then pushed through an unpopular sales tax increase with LDP help.

"Basically over the last three years the ruling Democratic Party has tried to do all sorts of things, but every policy they've tried has backfired," said Shunichi Asanagi, a 40-year old company executive voting for the LDP.

(Additional reporting by Mari Saito, Ruairidh Villar, Leika Kihara, Editing by Raju Gopalakrishnan and Michael Perry)

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Body found in Singapore River

SINGAPORE: A man was found dead in the Singapore River along Clarke Quay early Sunday morning.

The Singapore Civil Defence Force (SCDF) said it received a call at about 1.30am.

Someone was spotted jumping into the river near Block A.

SCDF officers arrived about four minutes later and conducted a search around the area.

Diving at a depth of about 3 metres, rescuers retrieved the body of a man about three-and-a-half hours later.

He was pronounced dead at the scene.

Police are investigating the unnatural death.

- CNA/ir

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Google will alter search to end FTC antitrust inquiry, says report

The Federal Trade Commission may bring its two-year antitrust investigation of Google to a close by allowing the company to make voluntary changes to its search business, according to a report.

The search giant is said to be readying an announcement about changes to its use of "snippets," bits of text culled from sites such as Yelp and TripAdvisor and displayed in search results, Politico reports, citing unnamed sources. Yelp and others had charged Google with using their content without permission.

Google will also makes tweaks that will allow for easier porting of search-ad campaigns from Google to rival search services, Politico's sources said.

Politico suggested on Tuesday that the FTC may leave the search-related case to the European Commission, which has mounted an investigation of its own. Reuters reported on Tuesday that some Google competitors, sensing a possible defeat, are taking the case to the Justice Department.

Google and the FTC also look to be close to a settlement in a case involving so-called frand -- or standard essential -- patents owned by Google.

Politico said the FTC declined to comment on today's report about the search tweaks, and it said Google would provide only the following statement: "We continue to work cooperatively with the Federal Trade Commission and are happy to answer any questions they may have."

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