US politicians trade blame over 'fiscal cliff' talks

WASHINGTON: Democratic and Republican leaders traded blame as they left for the Christmas holiday amid fading hope of an agreement to avert a year-end fiscal crisis that could lead to stiff tax hikes and drastic budget cuts.

In the weekly Republican Party radio address on Saturday, House Speaker John Boehner, the top Republican in Congress, said that President Barack Obama's proposal to solve the crisis by raising taxes "would still leave red ink as far as the eye can see."

"What the president has offered so far simply won't do anything to solve our spending problem and begin to address our nation's crippling debt," Boehner said.

"Instead, he wants more spending and more tax hikes that will hurt our economy. And he refuses to challenge the members of his party to deal honestly with entitlement reform and the big issues facing our nation. That is why we find ourselves here today."

Boehner has made an offer to Obama that would raise US$1 trillion in tax revenue -- mostly through closing loopholes and ending certain deductions -- and another US$1 trillion in spending cuts, including in some social programs like Medicare.

"I told the president on Monday these were my bottom lines," Boehner said earlier.

The White House has described its own offer as US$1.2 trillion in tax revenues and nearly US$1 trillion in spending cuts, although Republicans dispute whether all of the austerity measures are real.

On Friday, president Obama seemed frustrated that Republicans were not willing to offer him a compromise after, in his eyes, he made major concessions to his opponents.

"Nobody gets 100 per cent of what they want," he said.

With just over a week to go before automatic and massive spending cuts and tax increases due to kick in for all Americans on January 1, Obama urged lawmakers to pass a scaled-down tax package to avoid the so-called fiscal cliff.

Obama said he still wanted a comprehensive and large deficit-cutting bill to put the US economy on the path to long-term prosperity, but in the meantime, he called for a stop-gap bill to protect middle-class taxpayers.

"There is absolutely no reason, none, not to protect these Americans from a tax hike. At the very least, let's agree right now on what we already agree on. Let's get that done."

Obama said he met Democratic Senate leader Harry Reid and spoke to Republican House Speaker John Boehner on the phone to discuss a fall-back plan, while stressing he still believed a big compromise was possible.

He asked Congress to next week produce a package that at a minimum prevents a tax hike on the middle class, would extend unemployment insurance and lays the groundwork for further deficit reduction next year.

The move would still satisfy his demand to raise taxes on the richest Americans, as all Bush-era taxes will go up on January 1, and Obama only envisions extending the lower rates for middle class earners.

"Everybody can cool off, everybody can drink some eggnog, have some Christmas cookies, sing some Christmas carols," Obama said.

"Call me a hopeless optimist, but I actually still think that we can get it done," said Obama, who will spend Christmas in his native Hawaii, but told reporters he would be back in Washington next week.

Obama's suggestion would extend tax breaks to 98 per cent of Americans -- those earning below US$250,000 a year. In talks with Boehner on a larger compromise, the president had offered to raise that threshold to US$400,000.

On Thursday, Republicans rejected a bid by Boehner to pass a backup bill to solve the crisis, leaving Washington in turmoil, markets spooked and renewing fears that America's political gridlock could spark a recession.

Obama's aides privately say they doubt that conservative deficit hawks, who oppose raising taxes as a matter of principle, will ever back a deal agreed with the president.

In that case, Boehner could opt to pass a compromise in the House with the help of votes from minority Democrats -- a move that could undermine his position as speaker with his own party.

Experts, however, say one way to make a tax hike on the wealthy more palatable for Republicans is to not make them vote for one at all.

Should the new year arrive with no deal, taxes will automatically rise for everyone. Congress could then technically vote to lower taxes on the middle class, something conservatives might be more willing to do.

- AFP/jc

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Offbeat game recasts Xmas tune as 'Little Bummer Boy'

If you don't want to be 'LDB Out,' avoid 'Little Drummer Boy' at all costs.

(Credit:
@Nelz9999)

There's a bigger danger this holiday season than ending up on Santa's naughty list. A lump of coal in a Christmas stocking is one thing. What can happen to you if you hear "Little Drummer Boy" is something else altogether.

You know the tune: "Come they told me/Pa rum pum pum pum/A newborn King to see/Pa rum pum pum pum." It's a Christmas standard, and in cities and small towns everywhere, it emanates from department store sound systems, TV commercials, Web sites -- you name it. To the average modern-day sophisticate, "Little Drummer Boy (note: read the story before clicking the link)" is nothing more than a song to love or hate, to endure or enjoy. But to the many players of the LDB Game, the song's aesthetic merits are hardly the point.

Here's how the game works: Once the holiday season starts (more on that later), you're alive until you hear LDB. Once you hear it -- don't worry, knocking around inside your own head doesn't count -- you're "LDB Out." Victory (and the attendant bragging rights) accrue to anyone who successfully avoids LDB until Christmas. On e-mail lists, blogs, Twitter, and Facebook, groups full of players intent on surviving LDB season are now in full swing.

One might ask why would anyone play LDB? To Bunny Watson, an Oakland, Calif., DJ who has served for years as unofficial game master for a couple of hundred players on one e-mail list, it's all about the stories. "The whole thing just struck me as hilarious for some reason. I saw it on someone's blog and decided I was going to play too. Then I 'infected' my friend group and got a bunch of people playing," she recalled. "It's as much a game of chance as of strategy, though people sometimes do really funny things in the name of strategy, such as wearing earplugs if they have to go shopping. I have one friend who just turns down her hearing aids."

There are all kinds of LDB hazards out there, not least of which is researching an article on the game (recommended: mute the computer's speakers). Given that shopping spots are one of the most common danger zones, many players limit their retail exposure as best they can. The LDB Game is not political, though, and players are not necessarily anticonsumerists. They don't Occupy anything. They love their high-tech gadgets, happily eat at restaurants, and even hope for spiffy presents under their trees. But they definitely want to win.

And so it was that on Thanksgiving Day, high above Berkeley, Calif., eight friends, all involved in the tech world in one form or another, sat enjoying a rich and satisfying dinner of deep-fried turkey, duck, and all the trimmings when a Christmas tune began to play. The potential for a massacre was huge. All eight people -- including the hosts -- could be taken out at once. The risk was recognized, threats were made. And understood. The music was changed. The tension lifted.

Others haven't been as lucky. At one Bay Area karaoke bar, a few weeks ago, a man who goes by the name of Weazie took out the entire saloon. With a dance version, no less.

More often, though, the moment of one's LDB demise is a private affair, and the e-mail lists and Facebook groups where players congregate are littered this time of year with LDB Out tales, many of which are embarrassingly banal (listening to the radio, shopping for gifts). Often, though, there's a fun -- or at least involved -- tale to be told, such as the fate Watson herself suffered one year when, deep into hours of fighting on the phone with her ISP over the crisis caused when her business' essential Web site went down, she got taken out by the company's hold muzak.

Players are honor bound to share their LDB Out stories, and they mostly do, because, really, the game is just a fun social exercise. And besides, there's a lot less pressure when your time is up. "I've been tempting fate this holiday season. I've spent more time in stores in the last two months than I have in probably the last 10 years,..." Robyn Herr, from Cleveland, reported to her e-mail list the other day after getting LDB'd in a novelty store called Big Fun, "now I don't have to be on guard for LDB for the rest of the season."

On the other hand, there's certainly pride in winning, and veteran players employ certain strategies year in and year out. Watson advises against going into a Home Depot or a "Bloodbath and Beyond." "Both claim many victims each year," she says. Also, avoid taxis if you can and make sure inexperienced players don't sing LDB to you, because it'll knock you both out.

Then there's well-known entertainment land mines. Among them, the 2012 "Saturday Night Live" Christmas special, the November 26 "Colbert Report," and for those with stacks of old DVDs lying around, the "West Wing" Season One Christmas episode.

In fact, it was thanks to that episode of "West Wing" that Watson was asked to weigh in on when, exactly, the LDB Game kicks off. Some -- you might consider them LDB Conservatives -- say the game isn't on until Thanksgiving Day. But to Watson, it starts when the first bells start jingling and the first notes of "Silent Night" are heard in stores. You know it when you see it. Halloween is risky, but the first day of fall is still too early. On September 21, Watson was asked for a ruling by a Democrat who was gearing up for the upcoming presidential election by doing a complete rewatching of Aaron Sorkin's hit show about life in the White House. LDB encountered, the hopeful question was whether it was fatal. "Whew! You're still in...and the game is NOT yet afoot," she replied.

A bigger question might be when it's safe to blast LDB. On a Web site purporting to spell out the rules of the game, it's said that the game ends at 12:01 a.m. on December 26. But in Watson's community, Christmas is a day of rest. "A group of friends has a tradition to sing it, loudly and drunkenly at 12:01 am on Christmas morning at an annual party," she said. "It's a silly, lighthearted part of the holiday season and it is one part you know is going to be entertaining, no matter how it goes down. You can even play it with your mom."

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Boehner's Take on Fiscal Cliff Deal: 'God Only Knows'

Dec 21, 2012 11:00am

Speaker of the House John Boehner bluntly acknowledged Friday morning he did not have the votes to pass his “Plan B” and said the only real solution is a broad agreement to cut spending and reform the tax code. Then he added these words:

“How we get there, God only knows.”

That about sums up the whole “fiscal cliff” situation after a chaotic Thursday night when Republicans had to abandon “Plan B” – their proposal to raise taxes only on people making more than $1 million.

Boehner said he is not giving up on talks to pursue a bipartisan agreement with the President, who wants taxes to be raised on people making more than $250,000. But Boehner made it clear nothing is going on right now.  Instead he said it was up to Senate Democrats and the White House to make the next move.

Read more  about “Plan B” and the dramatic action in the House on Thursday.

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Italy PM Monti resigns, elections likely in February

ROME (Reuters) - Italian Prime Minister Mario Monti tendered his resignation to the president on Friday after 13 months in office, opening the way to a highly uncertain national election in February.

The former European commissioner, appointed to lead an unelected government to save Italy from financial crisis a year ago, has kept his own political plans a closely guarded secret but he has faced growing pressure to seek a second term.

President Giorgio Napolitano is expected to dissolve parliament in the next few days and has already indicated that the most likely date for the election is February 24.

In an unexpected move, Napolitano said he would hold consultations with political leaders from all the main parties on Saturday to discuss the next steps. In the meantime Monti will continue in a caretaker capacity.

European leaders including German Chancellor Angela Merkel and European Commission President Jose Manuel Barroso have called for Monti's economic reform agenda to continue but Italy's two main parties have said he should stay out of the race.

Monti, who handed in his resignation during a brief meeting at the presidential palace shortly after parliament approved his government's 2013 budget, will hold a news conference on Sunday at which he is expected clarify his intentions.

Ordinary Italians are weary of repeated tax hikes and spending cuts and opinion polls offer little evidence that they are ready to give Monti a second term. A survey this week showed 61 percent saying he should not stand.

Whether he runs or not, his legacy will loom over an election which will be fought out over the painful measures he has introduced to try to rein in Italy's huge public debt and revive its stagnant economy.

His resignation came a couple of months before the end of his term, after his technocrat government lost the support of Silvio Berlusconi's centre-right People of Freedom (PDL) party in parliament earlier this month.

Speculation is swirling over Monti's next moves. These could include outlining policy recommendations, endorsing a centrist alliance committed to his reform agenda or even standing as a candidate in the election himself.

The centre-left Democratic Party (PD) has held a strong lead in the polls for months but a centrist alliance led by Monti could gain enough support in the Senate to force the PD to seek a coalition deal which could help shape the economic agenda.

BERLUSCONI IN WINGS

Senior figures from the alliance, including both the UDC party, which is close to the Roman Catholic Church, and a new group founded by Ferrari sports car chairman Luca di Montezemolo, have been hoping to gain Monti's backing.

He has not said clearly whether he intends to run, but he has dropped heavy hints he will continue to push a reform agenda that has the backing of both Italy's business community and its European partners.

The PD has promised to stick to the deficit reduction targets Monti has agreed with the European Union and says it will maintain the broad course he has set while putting more emphasis on reviving growth.

Berlusconi's return to the political arena has added to the already considerable uncertainty about the centre-right's intentions and increased the likelihood of a messy and potentially bitter election campaign.

The billionaire media tycoon has fluctuated between attacking the government's "Germano-centric" austerity policies and promising to stand aside if Monti agrees to lead the centre right, but now appears to have settled on an anti-Monti line.

He has pledged to cut taxes and scrap a hated housing tax which Monti imposed. He has also sounded a stridently anti-German line which has at times echoed the tone of the populist 5-Star Movement headed by maverick comic Beppe Grillo.

The PD and the PDL, both of which supported Monti's technocrat government in parliament, have made it clear they would not be happy if he ran against them and there have been foretastes of the kind of attacks he can expect.

Former centre-left prime minister Massimo D'Alema said in an interview last week that it would be "morally questionable" for Monti to run against the PD, which backed all of his reforms and which has pledged to maintain his pledges to European partners.

Berlusconi who has mounted an intensive media campaign in the past few days, echoed that criticism this week, saying Monti risked losing the credibility he has won over the past year and becoming a "little political figure".

(Additional reporting by Gavin Jones, Massimiliano Di Giorgio and Paolo Biondi; Writing by Gavin Jones and James Mackenzie; Editing by Michael Roddy)

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Psy's 'Gangnam Style' reaches one billion views

SEOUL: Psy's "Gangnam Style" became the first video to hit a billion views on YouTube on Friday, marking a fresh milestone in the global craze for the South Korean rapper and his horse-riding dance.

The view counter attached to "Gangnam Style," which was only posted on the video-sharing site July 15, clicked over into 10 figures, confirming its status as the most viewed video in the site's history.

"One billion views is an incredible number," said Kevin Allocca, YouTube trends manager, who attributed Psy's success "to the universal appeal of catchy music -- and er, great equine dance moves."

Psy has swept all before him in the past five months, hoovering up awards and scoring guest appearances with everyone from Madonna to the head of the United Nations.

The video and its singer have been given walk-on roles in major world events like the US presidential election and major maybe-events like the Mayan calendar-inspired speculation about looming global armageddon.

The timing of the one-billion views breakthrough dovetailed with a viral social network hoax that had the 16th century French seer Nostradamus apparently referencing Psy as a harbinger of the December 21 apocalypse.

And it came less than a month after the video took the all-time "most-viewed" title away from "Baby" by Canadian heartthrob Justin Bieber.

Bieber's effort was still in second place Friday with more than 812 million views.

"Perhaps what's most impressive about this feat is that it took just over five months to happen," Allocca said in a blog post.

"Congratulations to Psy, the flash mobbers, K-Pop fans and people who love fun across the globe," he added.

Although its imminent demise has been predicted many times, the Psy phenomenon has simply refused to die.

Every time it has looked like fading, another parody, another celebrity or even another world leader has popped up to administer some publicity CPR and restore it to health.

Rolling Stone put "Gangnam Style" at number 25 on its top 50 list of best songs for 2012 and labelled Psy as "Seoul Brother Number One." On the Billboard Hot 100 chart it peaked at number two.

The song -- which refers to a trendy Seoul district -- has spawned a mini tribute video industry and has been co-opted by an impressive roster of big names, including Chinese dissident artist Ai Weiwei.

It earned Psy a contract with Bieber's management agency and a number of assessments and projections have been posted claiming "Gangnam Style" has generated over US$8.1 million in advertising deals.

And the public has joined in, with tens of thousands turning out for giant flashmob performances of Psy's horse-riding dance in cities like Paris and Rome -- even beauty spots like South America's majestic Iguazu waterfalls.

The quirky star, whose real name is Park Jae-Sang, has won adulation in his homeland for the global hit and was awarded one of South Korea's highest cultural honours this month, the Okgwan Order of Cultural Merit.

Psy hit a speedbump in the United States when anti-American views he voiced a decade ago caught up with him last month -- but he apologised and went on to perform at a "Christmas in Washington" gala attended by Obama and his family.

South Korea sees popular culture as a potent export force, providing international exposure for a country that still feels overlooked in comparison to neighbours China and Japan.

The government has spent substantial time and money supporting the so-called Hallyu, or Korean Wave, of TV shows and pop music that has swept across Asia in the past decade.

- AFP/jc

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Hook up an iPhone, or iPod, to your car

In the past, we told you how to 'iPod your
car', which meant adding some sort of adapter to play music from an
iPod through a car's speakers. With iPhones, we not only play music, but also make handsfree phone calls and use navigation. In this guide, we will show you how to connect your iPhone to your car for sound, which could be music, turn-by-turn navigation, or a phone call. Of course, the solutions for music also apply to iPods. And if you use an
Android, check out Car Tech's guide to using your Android phone in the car.

Native support
If you are looking to buy a new car, or bought a car recently, check out our Tech Car Buying Guide. Most new cars come with Bluetooth handsfree calling systems and USB ports that work with your iOS devices for phone calls and music. In the Guide, we cover the different options and how they work. Ford's Sync system is one of our favorites, as it demonstrates excellent compatibility and capabilities, while being offered in a wide range of affordable cars. It includes advanced voice control for music playback and phone calls, while also supporting integration with some apps.

We have found that iPhones can be finicky about sending an audio signal out through Bluetooth or the cabled connection to a USB port. For example, if you first plug the iPhone into a car's USB port, then turn on the car, the ensuing Bluetooth connection will take over the audio. If you switch the car's audio source to iPhone, no sound comes through the speakers, but you will get sound over the Bluetooth connection. The work-around is to unplug the iPhone's cable, then plug it back in.

Stereo replacement
We refer to the in-dash stereo in a car as the head unit, as it is the component that sends audio signals to the amp and speakers. This may come as a surprise, but the most affordable and effective way to add iPhone and iPod support to a car with only a CD or cassette player is to replace its head unit.

Modern head units can be had with built-in Bluetooth support, which will support handsfree calls and music streaming from an iPhone. They also have USB ports, either on the front, rear, or both. You can run a USB port extension cable from the rear of the head unit to the console or glovebox of your car. Plug an iPhone or iPod into the USB port, and you can select music from the head unit's interface.

A quick search at Crutchfield for in-dash receivers with Bluetooth and iPod compatibility shows units starting at $100. However, installation costs can vary widely, so make sure to get an estimate from an installer before getting the work done. Alternatively, if you are handy with tools, head units are not that difficult to install on your own. Just make sure you have the proper installation kit for your vehicle so the head unit will fit well in the dashboard.

Adapter kit
If you do not want to replace the head unit in your car, you may find an adapter that will work with your existing in-dash head unit. Companies such as USA Spec and Grom Audio make components that plug into an existing car stereo, enabling an iPod or iPhone cabled connection, and sometimes Bluetooth. You will need to see if an adapter is available for your particular make and model of vehicle.

These adapters have the advantage of preserving the look of your dashboard. However, these kits can cost as much as a replacement stereo, and may require professional installation, adding to the cost. As your existing car stereo was not made to play music from an iPod or iPhone, you will not be able to select music by album, artist, or song. Some of these adapters trick the stereo into thinking your iPod is a CD changer, making the first six playlists appear as CDs in the changer on the interface.

Auxiliary inputs
Over the past decade, more and more cars came equipped with a simple auxiliary input. If your car has one, you can plug a 1/8th inch adapter cable from an iPhone's or iPod's headphone jack directly into it. There are also a few ways of adding an auxiliary input to an older car's stereo. If your car has a cassette tape player, there are adapters that mimic the shape of a cassette, and plug directly into the player, leaving the auxiliary input cable dangling out. This solution is very inexpensive, but audio quality can be very bad. There are also adapter kits, similar to those mentioned above, that plug into the back of an existing car stereo to add an input jack, but if you are going to all that trouble, might as well put in a full iPod compatible adapter.

Music and phone calls will come through your car's speakers, but you will only be able to control the volume from the car's stereo. Using this method, it works best to start a long playlist or shuffle all songs before you start driving, so you will not need to touch the phone while barreling down the freeway or negotiating traffic. We would also not advise answering or making phone calls, because you will not be able to keep both hands on the wheel.

Bluetooth
Headsets and car speakerphones with Bluetooth have been available for years. Companies such as Motorola and Parrot produce units with varying feature levels, such as voice command and contact list integration. More advanced units include Bluetooth audio streaming, letting you also play music from an iPhone to the Bluetooth unit.

However, you do not want to listen to your music through a cheap speaker on a Bluetooth speakerphone. Some of these units include either an auxiliary input adapter or a radio frequency transmitter, sometimes both, to send the audio to your car's speakers. If your car has an auxiliary input, we recommend using a Bluetooth device with an auxiliary adapter instead of a radio frequency transmitter, as the audio quality will be better. Bluetooth audio streaming devices with handsfree calling capability start at about $40, so make one of the best combinations for cost and convenience. However, you will still need to use your iPhone to select music.

Radio frequency transmitter
Along with cassette adapters, radio frequency transmitters (RF transmitters) are one of the oldest ways of playing music from a portable device through a car's stereo system. RF transmitters take an audio input, usually from a headphone jack, and send out a low power radio frequency that can be picked up by your car's radio tuner. The problem with these devices is that the signal easily gets overpowered by radio stations, and in areas with a dense population, every band on the radio tends to be occupied. These devices can be found for under 10 dollars, but we do not recommend them.

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House GOP: We have the votes for "Plan B"

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Cantor: "We're going to have the votes" to pass "Plan B"

Updated 1:45 p.m. ET

As the House readies for an expected vote on an alternate plan, dubbed "Plan B," to avoid massive tax hikes on all income earners, House Majority Leader Eric Cantor, R-Va., said he is confident he will have enough support to pass their plan.

"We're going to have the votes," Cantor told reporters this morning.

"Plan B," a scaled-back measure that extends tax rates for everyone except those making $1 million, comes to the House floor at the unilateral direction of Republican leadership just days after it seemed talks between House Speaker John Boehner, R-Ohio, and President Obama were progressing to avert the so-called "fiscal cliff." Both sides offered major concessions to move toward compromise, but aides tell CBS News White House correspondent Major Garrett that Boehner didn't have enough support in his party to pass his proposal that included $1 trillion worth of revenue increases.

While "Plan B" would raise taxes on millionaires, which is something Democrats support, it does not go far enough for Democrats who want higher tax rates for more income earners. The president's latest "fiscal cliff" offer would raise the marginal tax rate to 39.6 percent on those making more than $400,000, a concession from his previous demand that taxes go up for households making more than $250,000.

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Boehner: Dems' "Plan B" is "slow walk" over "fiscal cliff"

Boehner said he is doing his part by offering "Plan B"  to ensure taxes don't increase on millions of Americans in the New Year. "It will be up to Senate Democrats and the White House to act," he told reporters today.

While Cantor says they have the votes to pass the alternative, some Republicans expressed reservations because it would raise taxes on about 400,000 families, or about 0.2 percent of Americans.

Boehner's proposal doesn't abide by "clear conservative, clear Republican principles," Rep. Tim Huelskamp, R-Kan, told CBS News correspondent Nancy Cordes.

Perhaps offering Republicans an out, in an about-face, anti-tax crusader Grover Norquist said Boehner's proposal does not raise taxes. Other outside conservative groups, however, including the Heritage Foundation and FreedomWorks, are urging Republicans to vote against "Plan B", saying it does raise taxes.

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Reid: "Boehner's plans are nonstarters in the Senate"

Generally opposed to raising any taxes at all, Republicans are also reluctant to vote for a plan that has already been declared dead in the Senate by Majority Leader Harry Reid, D-Nev., if it passes the House. "Speaker Boehner's plans are non-starters in the Senate," Reid reiterated today. 

Even if it somehow cleared both houses of Congress, the White House announced Wednesday that it would veto "Plan B."

Another reason some Republicans also objected to Boehner's "Plan B" because it doesn't include spending cuts. Republican leadership addressed that concern Thursday morning, however, by offering a second piece of legislation that cuts $200 billion from the federal budget.

House Republicans "are taking concrete actions" to avert the "fiscal cliff" and reduce spending, Cantor said. "Absent a balanced offer from the president, this is our nation's best option."

During a news conference Wednesday, the president said Republicans "keep on finding ways to say no as opposed to finding ways to say yes" on agreeing to a deal to avert the "fiscal cliff."

He added that it's time for the Republicans to step up and compromise because its' "what the country needs."

The president pointed out their proposals are only "a few hundred billion dollars" apart. "The idea that we would put our economy at risk because you can't bridge that cap doesn't make a lot of sense," he said.

The president's latest proposal includes about $1.2 trillion dollars of revenue increases and $800 billion in spending cuts. Boehner said it's not balanced. His latest offer is, which is not what the House is voting on today, includes about $1 trillion in spending cuts and $1 trillion in tax increases.

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Merry 'Cliffmas'! Chances for a Deficit Deal Dim

The outlook for a deal to avert the "fiscal cliff" by Christmas is increasingly grim, though lawmakers and the White House still have hope for a deficit-reduction compromise by the end of the year.

Republicans will move forward tonight with a vote to pass House Speaker John Boehner's so-called "Plan B option" – an extension of current tax rates for Americans making up to $1 million a year while replacing some pending automatic cuts to defense and domestic programs with other measures.

The step seeks to show Republicans acting to avoid an income tax hike on 99 percent of Americans in 2013, and leverage new pressure on President Obama in the ongoing talks for a broader "cliff" deal.

"Absent a balanced offer from the president, this is our nation's best option and Senate Democrats should take up both of these measures immediately," House Majority Leader Eric Cantor said today.

Obama has threatened to veto the legislation, calling it counterproductive and the cuts burdensome for the middle class. If the Senate were to consider the bill to stave off a looming tax hike, Democrats would surely amend it to enact more amicable terms.

"'Plan B'... is a multiday exercise in futility at a time when we do not have the luxury of exercises in futility," said White House spokesman Jay Carney.

Jacquelyn Martin/AP Photo

Outgoing Sen. Joe Lieberman Criticizes Colleagues for Putting Party Above Country Watch Video

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The posturing on "plan B" has drawn focus away from a broader bargain on taxes, spending, entitlement reforms and other measures that had begun coming into focus earlier this week.

Obama and Boehner have not spoken since Monday, though staff-level talks have continued behind the scenes.

Senate Majority Leader Harry Reid said lawmakers would break for the Christmas holiday but return to Washington one week from today.

"If you look at Speaker Boehner's proposal and you look at my proposal, they're actually pretty close," Obama said Wednesday, appealing for a big "fair deal."

"It is a deal that can get done," he said. "But it cannot be done if every side wants 100 percent. And part of what voters were looking for is some compromise up here."

The latest offers exchanged by Obama and Boehner are roughly $450 billion apart, largely differing on where to draw the line for an income tax hike at the end of the year.

Obama wants to see rates rise on incomes above $400,000 a year, a concession from his earlier insistence on a $250,000 threshold. Boehner, who had opposed any tax rate increase, now says he could agree to a rate hike on earners of $1 million or more.

Both sides also disagree about the size of spending cuts and changes to entitlement programs.

Obama's plan would trim spending by $800 billion over a decade with half coming from Medicare and Medicaid. He has also agreed to limits on future cost-of-living increases for Social Security beneficiaries, something anathema to many Democrats.

But Boehner has said the cuts are insufficient. He seeks $1 trillion or more in spending reductions, citing entitlement programs as the primary drivers of U.S. deficits and debt.

"For weeks the White House said that if I moved on [tax] rates that they would make substantial concessions on spending cuts and entitlement reforms. I did my part. They've done nothing," Boehner said today.

"The real issue here, as we all know, is spending," he said. "I don't think that the White House has gotten serious about the big spending problem that our country faces."

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Syrian rebels fight for strategic town in Hama province

BEIRUT (Reuters) - Rebels began to push into a strategic town in Syria's central Hama province on Thursday and laid siege to at least one town dominated by President Bashar al-Assad's minority sect, activists said.

The operation risks inflaming already raw sectarian tensions as the 21-month-old revolt against four decades of Assad family rule - during which the president's Alawite sect has dominated leadership of the Sunni Muslim majority - rumbles on.

Opposition sources said rebels had won some territory in the strategic southern town of Morek and were surrounding the Alawite town of al-Tleisia.

They were also planning to take the town of Maan, arguing that the army was present there and in al-Tleisia and was hindering their advance on nearby Morek, a town on the highway that runs from Damascus north to Aleppo, Syria's largest city and another battleground in the conflict.

"The rockets are being fired from there, they are being fired from Maan and al-Tleisia, we have taken two checkpoints in the southern town of Morek. If we want to control it then we need to take Maan," said a rebel captain in Hama rural area, who asked not to be named.

Activists said heavy army shelling had targeted the town of Halfaya, captured by rebels two days earlier. Seven people were killed, 30 were wounded, and dozens of homes were destroyed, said activist Safi al-Hamawi.

Hama is home to dozens of Alawite and Christian villages among Sunni towns, and activists said it may be necessary to lay siege to many minority areas to seize Morek. Rebels want to capture Morek to cut off army supply lines into northern Idlib, a province on the northern border with Turkey where rebels hold swathes of territory.

From an offshoot of Shi'ite Islam, Alawites have largely stood behind Assad, many out of fear of revenge attacks. Christians and some other minorities have claimed neutrality, with a few joining the rebels and a more sizeable portion of them supporting the government out of fear of hardline Islamism that has taken root in some rebel groups.

Activists in Hama said rebels were also surrounding the Christian town of al-Suqeilabiya and might enter the city to take out army positions as well as those of "shabbiha" - pro-Assad militias, the bulk of whom are usually Alawite but can also include Christians and even Sunnis.

"We have been in touch with Christian opposition activists in al-Suqeilabiya and we have told them to stay downstairs or on the lowest floor of their building as possible, and not to go outside. The rebels have promised not to hurt anyone who stays at home," said activist Mousab al-Hamdee, speaking by Skype.

He said he was optimistic that potential sectarian tensions with Christians could be resolved but that Sunni-Alawite strife may be harder to suppress.

SECTARIAN FEARS

U.N. human rights investigators said on Thursday that Syria's conflict was becoming more "overtly sectarian", with more civilians seeking to arm themselves and foreign fighters - mostly Sunnis - flocking in from 29 countries.

"They come from all over, Europe and America, and especially the neighboring countries," said Karen Abuzayd, one of the U.N. investigators, told a news conference in Brussels.

Deeper sectarian divisions may diminish prospects for post-conflict reconciliation even if Assad is ousted, and the influx of foreigners raises the risk of fighting spilling into neighboring countries riven by similar communal fault lines.

Some activists privately voiced concerns of sectarian violence, but the rebel commander in Hama said fighters had been told "violations" would not be tolerated and argued that the move to attack the towns was purely strategic.

"If we are fired at from a Sunni village that is loyal to the regime we go in and we liberate it and clean it," he said. "So should we not do the same when it comes to an Alawite village just because there is a fear of an all-out sectarian war? We respond to the source of fire."

President Vladimir Putin of Russia, Assad's main ally and arms supplier, warned that any solution to the conflict must ensure government and rebel forces do not merely swap roles and fight on forever. It appeared to be his first direct comment on the possibility of a post-Assad Syria.

The West and some Arab states accuse Russia of shielding Assad after Moscow blocked three U.N. Security Council resolutions intended to increase pressure on Damascus to end the violence, which has killed more than 40,000 people. Putin said the Syrian people would ultimately decide their own fate.

Assad's forces have been hitting back at rebel advances with heavy shelling, particularly along the eastern ring of suburbs outside Damascus, where rebels are dominant.

A Syrian security source said the army was planning heavy offensives in northern and central Syria to stem rebel advances, but there was no clear sign of such operations yet.

Rebels seized the Palestinian refugee district of Yarmouk earlier this week, which put them within 3 km (2 miles) of downtown Damascus. Heavy shelling and fighting forced thousands of Palestinian and Syrian residents to flee the Yarmouk area.

Rebels said on Thursday they had negotiated to put the camp - actually a densely packed urban district - back into the hands of pro-opposition Palestinian fighters. There are some 500,000 Palestinian refugees and their descendants living in Syria, and they have been divided by the uprising.

Palestinian factions, some backed by the government and others by the rebels, had begun fighting last week, a development that allowed Syrian insurgents to take the camp.

A resident in Damascus said dozens of families were returning to the camp but that the army had erected checkpoints. Many families were still hesitant to return.

LEBANON BORDER POST TAKEN

Elsewhere, Syrian insurgents took over an isolated border post on the western frontier with Lebanon earlier this week, local residents told Reuters on Thursday.

The rebels already hold much of the terrain along Syria's northern and eastern borders with Turkey and Iraq respectively.

They said around 20 rebels from the Qadissiyah Brigade overran the post at Rankus, which is linked by road to the remote Lebanese village of Tufail.

Video footage downloaded on the Internet on Thursday, dated December 16, showed a handful of fighters dressed in khaki fatigues and wielding rifles as they kicked down a stone barricade around a small, single-storey army checkpoint.

Syrian Interior Minister Ibrahim al-Shaar arrived in Lebanon on Wednesday for treatment of wounds sustained in a bomb attack on his ministry in Damascus a week ago.

Lebanese medical sources said Shaar had shrapnel wounds in his shoulder, stomach and legs but they were not critical.

The Syrian opposition has tried to peel off defectors from the government as well as from the army, though only a handful of high-ranking officials have abandoned Assad.

The conflict has divided many Syrian families. Security forces on Thursday arrested an opposition activist who is also the relative of Vice President Farouq al-Sharaa, the Syrian Observatory said. The man was arrested along with five other activists who are considered pacifists, it said.

Sharaa, a Sunni Muslim who has few powers in Assad's Alawite-dominated power structure, said earlier this week that neither side could win the war in Syria. He called for the formation of a national unity government.

(Reporting by Erika Solomon; Editing by Andrew Osborn)

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Football: Newcastle powerless to keep Ba admits Pardew

LONDON: Newcastle manager Alan Pardew admitted on Thursday that his club are powerless to keep Demba Ba if the Senegal striker wants to quit St James' Park.

Ba has a clause in his contract that allows him to leave if another team offers 7.5 million pounds and Pardew knows the former West Ham star could attract interest from several clubs during the January transfer window.

The 27-year-old, who has scored 11 times this season, was forced to deny reports this week that he had said it would be a dream come true to join Arsenal, while Liverpool are also said to be interested.

In the circumstances, Pardew is resigned to a month of worrying that one of his key players will be tempted away from Tyneside.

"It's unfortunate that the contract he has leaves open a lot of questions because we have this clause and every window that comes around, I have to answer the same questions," Pardew said.

"It would be disappointing for him to leave in this window for this club and for his team-mates here, but the decision will be his, ultimately, because that clause is there.

"The most important things we have got with Demba is he is someone who is a goalscorer and he is scoring goals, and that's very, very important to a side.

"His commitment to and work-rate for the team, I don't fault."

- AFP/fa

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