Interpublic exits Facebook

(Reuters) – Interpublic Group of Cos said it sold its remaining investment in Facebook Inc for $ 95 million in cash.

Interpublic said it expects to record a pre-tax gain of $ 94 million. It had recorded a pre-tax gain of $ 132.2 million for the third quarter of last year from the sale of half of its 0.4 percent stake in Facebook.

Interpublic paid less than $ 5 million for the stake in 2006.

Shares of Facebook, which debuted with a market value of more than $ 100 billion in May, have lost nearly half their value since then on concerns about money-making prospects.

“We decided to sell our remaining shares in Facebook as our investment was no longer strategic in nature,” Chief Executive Michael Roth said in a statement.

Interpublic also authorized an increase in its existing share repurchase program to $ 400 million from $ 300 million. The company repurchased shares worth $ 151 million, as of September 30.

Shares of the company were up 1 percent at $ 10 on the New York Stock Exchange on Tuesday.

Facebook shares were marginally up at $ 23.00 on the Nasdaq.

(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Joyjeet Das)

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Why Sanofi’s Zaltrap Deal Won t Help Patients

Nurse administers chemotherapy to patient. Credit: National Cancer Institute.

I got excited when I read the New York Times story Nov. 9 (“Sanofi Halves Price of Cancer Drug Zaltrap After Sloan-Kettering Rejection)”. Zaltrap is an intravenous infusion colon cancer drug for metastatic colorectal cancer that is resistant to or has progressed with platinum-based chemotherapy. With a list price of $ 11,000 per patient per month, Zaltrap is about double the cost of Genentech’s Avastin. Sloan Kettering doctors rejected Zaltrap, claiming it offered no added value over Avastin, because it works no better than Avastin, and costs twice as much. Doctors from Sloan-Kettering Cancer Center, one the United States flagship cancer hospitals, published an op-ed in the NYTimes Oct. 14, titled “In Cancer Care, Cost Matters,” arguing that hospitals need to put their foot down when drugs are outrageously expensive with no added value. They wrote: “Soaring spending has presented the medical community with a new obligation. When choosing treatments for a patient, we have to consider the financial strains they may cause alongside the benefits they might deliver.” The importance of getting bang for your buck, or value in healthcare, has been a huge point in health policy circles in the United States. In fact, politicians of all stripes are quick to point to health outcomes data that show that despite the United States spending in the top tier of all nations for healthcare, health outcomes are far lower. What Sanofi announced in its response Nov. 8 to Sloan-Kettering, one could have easily thought that it was a victory for patients. However, the New York Times headline stating “Sanofi halves price…” is misleading. Sadly, the Zaltrap half-off deal is not a list price reduction at all. It is just a business discount plan for hospitals and oncologists. As Lisa Jane Hubbell, who uses high-cost disease modifying drugs for a noncancerous, chronic condition told me: “It won’t help patients, will it? Our copay will be based on full price, the docs will pocket the extra from insurance companies. It doesn’t really help anyone who is in need of help paying for healthcare.” Another woman with stage IV breast cancer says that she has been deemed ineligible for any discount for her high-priced cancer drugs because she is insured. In general, drug discount plans go to the uninsured. She emailed me: “The drug I took for five years was re-patented three times while I was on it, as I recall. It was orders of magnitude more expensive than the old standby tamoxifen for only a slight advantage in efficacy.” As The Times points out, Medicare patients are unlikely to see a lower price for Zaltrap for a long while until the discount is incorporated into Medicare payment calculations for Part B, which covers physician-administered drugs. In addition, oncologists have long marked up drugs that they administer for insurers and patients. Fortunately, Sloan-Kettering doctors are on the patients’ side and question whether Sanofi’s discount will make Zaltrap more affordable for patients. Peter Bach, MD, told me: “I don’t know if they’re going through steps to ensure reimbursement goes down to follow price or not. I’m hoping that is in their plans. If not, then yes, the windfall goes to providers, and our concern is the costs passed on to patients.” Leonard Saltzman, MD, the op-ed coauthor, and gastroenterology oncologist, from Sloan Kettering also called Sanofi to task for missing the boat in making Zaltrap affordable for patients. But pharmaceutical price fixing is nothing new, according to Frederic Kaye, MD, professor of hematology and oncology at the University of South Florida in Gainesville, Florida. “I saw this happen for the first time in the late 1980s when a veterinary pill levamisole, which cost pennies for the treatment of heartworm, underwent a 100 times price escalation when it was used for treating colon cancer. There was outrage at the time over lack of regulations for price fixing, but you see almost 25 years later, it is the same.” Sanofi’s drug discount plan is clearly a business imperative. If one of the US flagship cancer treatment centers says that they will not use Zaltrap, others could follow. But the refusal to lower Zaltrap’s list price is worrisome because patient copays are based on price. More importantly, if the Sanofi plan becomes the pharmaceutical industry’s modus operandi to the era of value-based healthcare, patients will still remain out in the cold, without any added relief for the high cost of drugs. Value-based healthcare will be something for facilities and hospitals and leave patients out in the cold. These days, you have to critically review the hoopla about “patient-centered health care” and the allegedly positive partnerships shaping healthcare. Were patients included when it really mattered in drafting this drug discount program? We need to maintain a high level of skepticism about deals made strictly between drug companies and hospitals, or arrangements made between industry and physicians, or industry and health plans. It’s been said before and it must be said again: “Nothing about me [the patient] that pertains to me should be done without me at the table.”  

Follow Scientific American on Twitter @SciAm and @SciamBlogs. Visit ScientificAmerican.com for the latest in science, health and technology news.
© 2012 ScientificAmerican.com. All rights reserved.

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Rock band AC/DC releases entire catalog on iTunes

NEW YORK (AP) — AC/DC is finally releasing its music digitally on iTunes.

Columbia Records and Apple announced Monday that the classic rock band’s music will be available at the iTunes Store worldwide. Sixteen studio albums will be released, including “High Voltage” and “Back in Black.”

AC/DC was one of the few acts that would not release music through the digital outlet. The Beatles and Kid Rock were also against selling music on iTunes, but have since jumped onboard. Country star Garth Brooks has yet to release his music on iTunes.

Four of AC/DC’s live albums and three compilation records are also available. The statement said the songs have been mastered for iTunes “with increased audio fidelity.”

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Canada pledges again to balance budget by 2015

OTTAWA/NEW YORK (Reuters) – The Canadian government on Friday reiterated its intention to balance its budget by 2015, three days after projecting there would be deficits until 2016-17.

In separate appearances in Quebec City and New York, Prime Minister Stephen Harper and Finance Minister Jim Flaherty were at pains to say they still intended to end the red ink by 2015.

“It remains the government’s plan, intention, to balance the budget prior to the next federal election. The recent economic and fiscal update by the minister indicates we are actually very close to that objective,” Harper told reporters in Quebec City. The next election is in October 2015.

Flaherty’s fall fiscal update on Tuesday had pushed back the target date for eliminating the deficit by a year, to 2016-17, citing a weak global economy.

But the minister said in a speech in New York that the government was on track to balance the budget in the next two to three years, barring major external events, and he later clarified that he intended a balanced budget by 2015.

“The prime minister’s always correct,” he chuckled.

He sought to explain the discrepancy by saying the fiscal update had built in a C$ 3 billion ($ 3 billion) contingency cushion, meaning there was an underlying surplus of C$ 1.2 billion for 2015-16. He said the projection of a C$ 1.8 billion deficit amounted to about half a percent of the C$ 275 billion federal budget.

“There’s lots of water to go under the bridge between now and then,” he said.

The opposition New Democratic Party noted the discrepancy in a release headlined: “Stephen Harper makes stuff up about balancing the budget.”

It pointed out that balancing the budget by the next election was not the same as balancing it by 2016-17.

As it is, even the 2015-16 timetable is a year later than offered in the Conservative campaign for reelection in May 2011. They had promised a balanced budget by 2014-15, followed by major personal income tax relief before the 2015 election.

Flaherty’s timetable drew criticism this week from the Canadian Taxpayers Federation, which said the minister had become expert at kicking the can down the road.

The projections could be thrown out of whack if the United States goes off the fiscal cliff, a set of automatic tax hikes and spending cuts that are to be triggered on January 2 if legislators and the White House cannot agree on a more nuanced budget deal.

Flaherty said U.S. failure to avert the fiscal cliff would cause a significant and immediate decline in Canada’s gross domestic product, and he would counter it.

Referring to a possible economic shock from Europe or the United States, he said: “If that were to happen and if the Canadian economy were to be pushed back into recession with the resulting danger for higher unemployment and the danger always of a prolonged recession, then we would act.”

He added: “We would not stand by and let that happen. The kinds of measure we can take: there are various tax measures we can take, there are measures with respect to stimulus we can take, these are things that we have done before and we can do again.”

On Tuesday, Flaherty spoke of having prepared various contingency plans.

(Additional reporting by Louse Egan; Editing by David Gregorio)

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Palestinian death toll in Gaza reaches 100: Health Ministry

GAZA (Reuters) - The number of Palestinians killed in Gaza during Israel's on-going offensive reached 100 on Monday, the Hamas-run Health Ministry said.

On his Facebook page, ministry spokesman Ashraf Al-Qidra listed Mohammed Tbail, killed in an air strike in Nusseirat refugee camp, as the 100th Palestinian fatality.

Qidra said the Palestinian dead included 24 children and 10 women. Ministry figures for the number of men killed in the conflict with Israel make no distinction between civilians and militants.

According to the ministry, 850 people have been wounded in Gaza since the hostilities began on Wednesday. They included 260 children and 140 women.

Israel puts its death toll since Wednesday at three civilians - two men and a woman killed by a rocket fired from Gaza. Police said more than 60 people have been wounded.

(Reporting by Nidal al-Mughrabi, Writing by Jeffrey Heller in Jerusalem, Editing by Allyn Fisher-Ilan)

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In Mark Cuban’s Humble Opinion, Facebook Still Kinda Sucks

Dallas Mavericks owner and billionaire Mark Cuban has confirmed reports from last week, in a post on his personal blog today, that he has a serious beef with Facebook. But before getting into all the reasons he no longer loves the social network, he clarifies one small point: “First, I’m not recommending to any of my companies that we leave facebook,” he writes. Last week ReadWriteWeb’s Dan Lyons kind of made it seem like Cuban planned to pull out altogether because of the way Facebook’s algorithm has affected the way people see his brands’s posts. The algorithm, Edgerank, controls brand posts so that not all fans are forced to see each one in their news feeds. Because of this, he quoted Cuban saying “We are moving far more aggressively into Twitter and reducing any and all emphasis on Facebook.” And later he had him talking about all the reasons he finds it horrible for businesses. Like, mainly, that it’s too expensive, a point that GigaOm’s Mathew Ingram called naive. “Really? That surprises you? What else did you think Facebook was going to do when it gave you a giant social platform for nothing?” Cuban now explains that he isn’t bailing on Facebook, just de-emphasizing it in favor of other Internet places, like Tumblr and Twitter. But, that does not mean that he does not hate Facebook as much as everyone has been saying he hates Facebook. He does.

RELATED: Shafted Facebook Founder Is Living Like a Kardashian in Singapore

You can read the laundry list of reasons over at his personal blog, but some highlights include:

RELATED: Eduardo Saverin May Be Barred from Returning to the U.S. After Renouncing Citizenship

• Its a time waster … FB doesn’t seem to want to accept that it’s best purpose in life is as a huge time suck. 


• IMHO, FB really risks screwing up something that is special in our lives as a time waster by thinking they have to make it more engaging and efficient.


• So by default you are not going to use your newsfeed as a primary source of information. It’s more like the township newspaper


• I also think that FB is making a big mistake by trying to play games with their original mission of connecting the world.  FB is a fascinating destination that is an amazing alternative to boredom which excels in its SIMPLICITY.  One of the threats in any business is that you outsmart yourself. FB has to be careful of just that.

Basically Mark Cuban thinks Facebook should stop trying to make money and stop trying to get too smart, which might work in the favor of Cuban who doesn’t want to spend too much money on something silly like social media. But,this doesn’t sound too appealing to Facebook, which as a public company needs to make money. Unless more join his cause, which could maybe happen. At least the Miami blog the 305 agrees with him. Anyone else? 

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Questions of Blame Linger 34 Years After Jonestown

From the age of 13, Leslie Wagner Wilson had been indoctrinated in the California-based Peoples Temple, led by the charismatic Jim Jones, whose mission was to foster racial harmony and help the poor.

But on Nov. 18, 1978, she and a handful of church members fought their way through thick jungle in the South American country of Guyana, escaping a utopian society gone wrong where followers were starved, beaten and held prisoner in the Jonestown compound.

She walked 30 miles to safety with her 3-year-old son, Jakari, strapped to her back and a smaller group of defectors. But just hours later, the mother, sister and brother and husband she left behind were dead.

“I was so scared,” said Wagner, now 55. “We exchanged phone numbers in case we died. I was prepared to die. I never thought I would see my 21st birthday.”

Today, on the 34th anniversary, Wilson said it’s important to remember the California-based Peoples Temple Jonestown massacre, especially the survivors who have wrestled with their consciences for decades.

PHOTOS: Jonestown Massacre Anniversary

Nine members of her family were among the 918 Americans who died that day, 909 of them ordered by Jones to drink cyanide-laced Kool-Aid in the largest ritual suicide in history.

Her husband, Joe Wilson, was one of Jones’ top lieutenants who helped assassinate congressman Leo Ryan and his press crew when they tried to free church members who were being held against their will.

After arriving back in the United States, Wilson said she “went through hell” — three failed marriages, drug use and suicidal thoughts she describes in her 2009 book, “Slavery of Faith.”

“I was like Humpty Dumpty, but you couldn’t put me back together again,” she said.

Survivors, many of them African-American like Wilson, say they felt guilt and shame and faced the most agonizing question surrounding the nation’s single largest loss of life until 9/11: Was it suicide or murder?

Full Coverage: Jonestown Massacre

In the now-famous “death tape,” supporters clapped and babies cried as Jones instructed families to kill the elderly first, then the youngest in protest against capitalism and racism. Mothers poisoned 246 children before taking their own lives.

“We really can’t understand the Peoples Temple without looking at the historical time period when it arose,” said Rebecca Moore, a professor of religious studies at San Diego State University.

“With the liberation movements of the ’60s and ’70s, the collapse of the black-power movement, the Peoples Temple was the main institution in the San Francisco Bay area that promoted a message of integration and racial equality.”

Moore lost her two sisters and her nephew, the son of Jim Jones. “They were hardcore believers,” she said of her siblings.

Jim Jones, who was white, came from a “wrong side of the tracks,” poor background in Indiana where in the 1950s he became known as a charismatic preacher with an affinity for African-Americans.

“A number of survivors, including those who defected, believe to this day he had paranormal abilities,” said Moore, who met him years later. “He could heal them and read their minds.”

In the 1960s, Jones moved to San Francisco, where at the height of the Peoples Temple there were about 5,000 members.

WATCH: A Look Back at Jonestown Massacre

“They wanted my parents to join,” she said. “Like most outsiders, we didn’t have any idea what was happening outside closed doors.”

Jones ingratiated himself with celebrities and politicians, mobilizing voters to help elect Mayor George Moscone in 1975 and becoming chairman of the city’s housing authority.

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‘Twilight’ finale dawns with $141.3M weekend

LOS ANGELES (AP) — The sun has set on the “Twilight” franchise with one last blockbuster opening for the supernatural romance.

“The Twilight Saga: Breaking Dawn — Part 2″ sucked up $ 141.3 million domestically over opening weekend and $ 199.6 million more overseas for a worldwide debut of $ 340.9 million.

The finale ranks eighth on the list of all-time domestic debuts, and leaves “Twilight” with three of the top-10 openings, joining 2009′s “New Moon” (No. 7 with $ 142.8 million) and last year’s “Breaking Dawn — Part 1″ (No. 9 with $ 138.1 million).

Last May’s “The Avengers” is No. 1 with $ 207.4 million. “Batman” is the only other franchise with more than one top-10 opening: last July’s “The Dark Knight Rises” (No. 3 with $ 160.9 million) and 2008′s “The Dark Knight” (No. 4 with $ 158.4 million).

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Israel, Gaza fighting rages on as Egypt seeks truce

GAZA/JERUSALEM (Reuters) – Israel bombed Palestinian militant targets in the Gaza Strip from air and sea for a fifth straight day on Sunday, preparing for a possible ground invasion though Egypt saw “some indications” of a truce ahead.

Militant rocket fire into Israel subsided during the night but resumed in the morning with three rockets fired at the nearby coastal city of Ashkelon, the Israeli army said.

“As of now we have struck more than 1,000 targets, so Hamas should do the math over whether it is or isn’t worth it to cease fire,” Israeli Vice Prime Minister Moshe Yaalon, over Twitter.

“If there is quiet in the South and no rockets and missiles are fired at Israel’s citizens nor terrorist attacks engineered from the Gaza Strip, we will not attack.”

Forty-eight Palestinians, about half of them civilians, including 13 children, have been killed in Israel’s raids, Palestinian officials said. More than 500 rockets fired from Gaza have hit Israel, killing three people and injuring dozens.

Israel unleashed intensive air strikes on Wednesday, killing the commander of the Hamas Islamist group that governs Gaza and spurns peace with the Jewish state. Israel’s declared goal is to deplete Gaza arsenals and press Hamas into stopping cross-border rocket fire that has plagued Israeli border towns for years.

Air raids continued past midnight into Sunday, with warships shelling from the sea. A Gaza City media building was hit, witnesses said, wounding 6 journalists and damaging facilities belonging to Hamas’s Al-Aqsa TV as well as Britain’s Sky News.

An Israeli military spokeswoman said the strike had targeted a rooftop “transmission antenna used by Hamas to carry out terror activity”.

Two other predawn attacks on houses in the Jabalya refugee camp killed two children and wounded 13 other people, medical officials said.

These attacks followed a defiant statement by Hamas military spokesman Abu Ubaida, who told a news conference: “This round of confrontation will not be the last against the Zionist enemy and it is only the beginning.”

The masked gunman dressed in military fatigues insisted that despite Israel’s blows Hamas “is still strong enough to destroy the enemy”.

An Israeli attack on Saturday destroyed the house of a Hamas commander near the Egyptian border.

Casualties there were averted however, because Israel had fired non-exploding missiles at the building beforehand from a drone, which the militant’s family understood as a warning to flee, and thus their lives were spared, witnesses said.

Israeli aircraft also bombed Hamas government buildings in Gaza on Saturday, including the offices of Prime Minister Ismail Haniyeh and a police headquarters.

Among those killed in air strikes on Gaza on Saturday were at least four suspected militants riding motorcycles, and several civilians including a 30-year-old woman.

ISRAELI SCHOOLS SHUT

Israel said it would keep schools in its south shut on Sunday as a precaution to avoid casualties from rocket strikes reaching as far as Tel Aviv and Jerusalem in the past few days.

Israel’s “Iron Dome” missile interceptor system destroyed in mid-air a rocket fired by Gaza militants at Tel Aviv on Saturday, where volleyball games on the beach front came to an abrupt halt as air-raid sirens sounded.

Hamas claimed responsibility for the attack on Tel Aviv, the third against the city since Wednesday. It said it had fired an Iranian-designed Fajr-5 at the coastal metropolis, some 70 km (43 miles) north of Gaza.

In the Israeli Mediterranean port of Ashdod, a rocket ripped into several balconies. Police said five people were hurt.

Israel’s operation has drawn Western support for what U.S. and European leaders have called Israel’s right to self-defense, but there was also a growing number of calls from world leaders to seek an end to the violence.

British Prime Minister David Cameron “expressed concern over the risk of the conflict escalating further and the danger of further civilian casualties on both sides,” in a conversation with Israeli Prime Minister Benjamin Netanyahu, a spokesperson for Cameron said.

London was “putting pressure on both sides to de-escalate,” the spokesman said, adding that Cameron had urged Netanyahu “to do everything possible to bring the conflict to an end.”

Ben Rhodes, a deputy national security adviser to President Barack Obama, said the United States would like to see the conflict resolved through “de-escalation” and diplomacy, but also believes Israel has a right to self-defense.

Egyptian President Mohamed Mursi said in Cairo as his security deputies sought to broker a truce with Hamas leaders, that “there are some indications that there is a possibility of a ceasefire soon, but we do not yet have firm guarantees.”

Egypt has mediated previous ceasefire deals between Israel and Hamas, the latest of which unraveled with recent violence.

A Palestinian official told Reuters the truce discussions would continue in Cairo on Sunday, saying “there is hope,” but it was too early to say whether the efforts would succeed.

In Jerusalem, an Israeli official declined to comment on the negotiations. Military commanders said Israel was prepared to fight on to achieve a goal of halting rocket fire from Gaza, which has plagued Israeli towns since late 2000, when failed peace talks led to the outbreak of a Palestinian uprising.

Diplomats at the United Nations said Secretary-General Ban Ki-moon is expected to visit Israel and Egypt in the coming week to push for an end to the fighting.

POSSIBLE GROUND OFFENSIVE

Israel, with tanks and artillery positioned along the frontier, said it was still weighing a ground offensive.

Israeli cabinet ministers decided on Friday to more than double the current reserve troop quota set for the Gaza offensive to 75,000 and around 16,000 reservists have already been called up.

Asked by reporters whether a ground operation was possible, Major-General Tal Russo, commander of the Israeli forces on the Gaza frontier, said: “Definitely.”

“We have a plan. … It will take time. We need to have patience. It won’t be a day or two,” he added.

A possible move into the densely populated Gaza Strip and the risk of major casualties it brings would be a significant gamble for Netanyahu, favored to win a January election.

The last Gaza war, a three-week Israeli blitz and invasion over the New Year of 2008-09, killed 1,400 Palestinians, mostly civilians. Thirteen Israelis died in the conflict.

But the Gaza conflagration has stirred the pot of a Middle East already boiling from two years of Arab revolution and a civil war in Syria that threatens to spread beyond its borders.

One major change has been the election of an Islamist government in Cairo that is allied with Hamas, potentially narrowing Israel’s maneuvering room in confronting the Palestinian group. Israel and Egypt made peace in 1979.

(Writing by Allyn Fisher-Ilan; Editing by Douglas Hamilton)

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Fiscal cliff negotiators are facing high hurdles

WASHINGTON (AP) — It's entirely possible that lawmakers and the White House will reach a deal that staves off an avalanche of tax increases and deep cuts in government programs before a Jan. 1 deadline. To do so, however, they'll have to resolve deep political and fiscal disagreements that have stymied them time after time despite repeated promises to overcome them.

For many economists, corporate leaders and politicians, it's unconscionable to let the government veer over the "fiscal cliff," which could drain $500 billion from the still-struggling economy next year. But even President Barack Obama says it could happen.

"Obviously we can all imagine a scenario where we go off the fiscal cliff," the president said last week. The likeliest cause, he suggested, would be "too much stubbornness in Congress," especially on the issue of taxes.

Many Republicans in Congress counter that it's Obama who is too unyielding.

The knottiest issues facing the White House and congressional negotiators include:

TAX RATES

Obama campaigned on a pledge to end the George W. Bush-era tax cuts for households making more than $250,000 a year. Republican leaders say the lower rates from 2001 and 2003 should remain in place for everyone, including the rich.

Both sides have dug in so deeply that it will be politically painful to back down. Republicans say tax increases on the rich would inhibit job growth. Democrats dispute that, and say it's only fair for the wealthiest to provide more revenue in this era of historically low tax burdens and a growing income disparity between the rich and the poor.

Most Republican lawmakers have signed a pledge not to allow tax rates to rise, even if they are scheduled to do so by law, as are the Bush-era cuts. Some Democrats say it may be necessary to let the Dec. 31 deadline expire and have everyone's tax rates revert to the higher, pre-Bush levels. Then, the argument goes, Republicans could vote to bring the rates back down for most Americans, but not the richest, without breaking their pledge.

The tax rate issue is especially thorny because it doesn't lend itself to Washington's favorite tactics for postponing hard decisions. Lawmakers routinely resort to "continuing resolutions" to end budget impasses by keeping spending levels unchanged for yet another year. Politically, no one wins or loses.

Obama's campaign promise to raise tax rates on the wealthy precludes that. Either rates on the rich will rise and Republicans will absorb defeat on a huge priority, or the rates will remain unchanged, a political defeat for Obama.

LOBBIES AND THE STATUS QUO

Both parties have talked, vaguely, of raising revenues by limiting the itemized tax deductions claimed by about one-third of the nation's taxpayers. Among the most popular deductions are those for charitable donations, health care costs and mortgage interest payments. Each is represented by muscular lobbying groups that will fight to protect the millions or billions of dollars these tax breaks steer their way.

An array of ideas has been floated. They include capping a taxpayer's total deductions at $35,000 or $50,000, and limiting the value of deductions to 28 percent, instead of the current 35 percent for high earners. The coalition of universities and other institutions that rely on tax-exempt donations is so influential that some strategists say charitable gifts should be left untouched. The housing industry says the same about home mortgage interest.

"Once you put something on the table, there is enormous pushback all around," said Rep. Peter Welch, D-Vt. He says going over the fiscal cliff, at least temporarily, may be the only way to force Republicans to accept tax increases and to embolden lawmakers to make painful choices.

50-50 NATION, 90-10 DISTRICTS

The past few presidential elections prove the country is almost evenly split between Democratic and Republican sentiments. But thanks to legislative gerrymandering, Americans' migration patterns and other factors, many House members represent districts that are overwhelmingly conservative or liberal. These lawmakers may recognize that compromise is the only way to get a law enacted in Congress.

But compromise may be a ticket to defeat in their next primary election by an ideological purist from their party's fringe.

This is especially apparent among some House Republicans who say Obama's re-election victory means little to them and their constituents. GOP insiders say House Speaker John Boehner, R-Ohio, expects to lose as many as 70 of his 241 fellow Republicans on a career-defining vote on an eventual compromise package to resolve the fiscal cliff. If Republican defections go much higher, it may be impossible for Boehner to push on without risking his speakership.

Rep. Raul Labrador, R-Idaho, is among the conservatives who seem unlikely to embrace a bipartisan compromise. "We will continue to fight any member of our conference that decides this is a good time to raise taxes," he said last week.

DEMANDING CONSTITUENTS

For years, Americans have enjoyed high levels of government service at low levels of taxation, historically speaking. So the government borrows about one-third of every dollar it spends, piling up debt for future generations. Both parties often talk about cutting spending. But not much happens because constituents demand services they consider important and every government program is important to someone.

Solving the fiscal cliff is daunting, not merely because politicians must make tough decisions to raise taxes and shrink programs; these are the kinds of decisions that can get a candidate defeated. There's also the magnitude of the unpleasantness needed to make a real dent in deficit-spending after so many years of a government free lunch.

Because he has to submit a budget to Congress every year, the president has proposed more specific ideas for raising revenue and reducing spending than have the Republicans. He would raise an assortment of taxes on the wealthy. Obama says he wants $1.6 trillion over 10 years in new revenues. That's double the amount Boehner has suggested. As for spending, Obama would seek cuts in health costs, farm subsidies, rent assistance, airport construction and other programs.

Republicans have offered fewer details for how to bridge the spending gap, saying the president is obligated to lead.

Republicans say lower tax rates would spur economic growth, and thereby increase overall tax revenues. Economists say this "dynamic scoring" concept, related to "supply side economics," has run out of gas at today's low tax levels. As a share of the economy, federal tax receipts over the past three years have hit their lowest levels since 1950.

Sen. Chuck Schumer, D-N.Y., said it's "a myth" that Republicans can find enough revenue from limiting itemized deductions. "Our Republican colleagues cannot play games on revenues," he said.

That kind of tough talk makes life difficult for Boehner, Obama and the handful of other leaders trying to find a way to avoid a New Year's drive over the fiscal cliff.

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