No Senate vote yet on proposed fiscal cliff deal






STORY HIGHLIGHTS


  • Senate leaders cut a deal to avoid the fiscal cliff

  • Biden pitches the plan to Democrats late Monday

  • Obama says more work will be needed and chides Congress for dragging its feet

  • "Take the 84% of your winnings off the table," anti-tax crusader advises GOP




As the fiscal cliff looms, what's your New Year's message to Washington? Go to CNN iReport to share your video.


(CNN) -- Senate leaders and the White House struck a last-minute deal to avert the feared fiscal cliff Monday night, with Vice President Joe Biden headed to the Capitol Hill to pitch the plan to fellow Democrats.


"Happy New Year," Biden, who became the Democratic point man in the talks, told reporters. "Did you think we would be here New Year's Eve?"


A senior Democratic aide told CNN that if caucus meetings went well, a Senate vote could come "within the hour." But the House of Representatives went home long before midnight, meaning nothing will get through Congress before the combination of tax increases and spending cuts lawmakers have been scrambling to head off starts to kick in, at least on paper.


A source familiar with the deal told CNN that the Senate proposal would put off the cuts for two months and keep the expiring Bush-era tax cuts for individuals earning less than $400,000 or couples earning less than $450,000. President Barack Obama has long demanded that the threshold be set at $250,000.


Tax rates on income above those levels would go back to the Clinton-era rate of 39.6%, up from the current 35%, and itemized deductions would be capped at $250,000 for individuals and $300,000 for couples. That would generate an estimated $600 billion in additional revenue over 10 years.


Taxes on inherited estates will go up to 40% from 35%, but the exemption will be indexed to rise with inflation -- a provision the source said was added at the insistence of moderate Democrats.


Unemployment insurance would be extended for a year for for 2 million people, and the alternative minimum tax -- a perennial issue -- would be permanently adjusted for inflation. Child care, tuition and research and development tax credits would be renewed. And the "Doc Fix" -- reimbursements for doctors who take Medicare patients -- will continue, but it won't be paid for out of the Obama administration's signature health care law.


Biden had been in negotiations with Senate Minority Leader Mitch McConnell, R-Kentucky, since Sunday afternoon. Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi, both Democrats, agreed to the plan in calls with President Barack Obama, a Democratic source said Monday night.


In the House, GOP sources said earlier Monday that there's little practical difference in settling the issue Monday night versus Tuesday. But if tax-averse House Republicans approve the bill on Tuesday -- when taxes have technically gone up -- they can argue they've voted for a tax cut to bring rates back down, even after just a few hours, GOP sources said. That could bring some more Republicans on board, one source said.


Economists warn the one-two punch of tax increases and spending cuts, known as "sequestration," could push the U.S. economy back into recession and drive unemployment back over 9% by the end of 2013. Obama had chided lawmakers for their last-minute scramble earlier Monday, hitting a nerve among several Republicans in the Senate.


Latest updates: Final fiscal cliff scramble


"They are close, but they're not there yet," he said. "And one thing we can count on with respect to this Congress is that if there is even one second left before you have to do what you're supposed to do, they will use that last second."


The president warned that if Republicans think they can get future deficit reduction solely through spending cuts "that will hurt seniors, or hurt students, or hurt middle-class families without asking also equivalent sacrifice from millionaires or companies with a lot of lobbyists ... they've got another thing coming."


That irked Republican senators who have been grappling for a deal with the Democratic majority in that chamber. Sen. Bob Corker, R-Tennessee, called the president's comments "very unbecoming of where we are at this moment" and added, "My heart's still pounding."


"I know the president has fun heckling Congress," Corker said. "I think he lost probably numbers of votes with what he did."


Read more: Why your paycheck is getting smaller, no matter what


As Monday's deadline drew nigh, federal agencies were preparing for the possibility of furloughing workers. At the Pentagon, a Defense Department official said as many as 800,000 civilian employees could be forced to take unpaid days off as the armed services face an expected $62 billion in cuts in 2013 -- about 12% of its budget.


Those workers perform support tasks across the department, from maintaining aircraft and weapons systems to processing military payrolls and counseling families. The Pentagon believes it can operate for at least two months before any furloughs are necessary, but has to warn its civilian workforce that furloughs could be coming, the official said.


Read more: What if there's no deal on fiscal cliff


The White House budget office noted in September that sequestration was designed during the 2011 standoff over raising the federal debt ceiling as "a mechanism to force Congress to act on further deficit reduction" -- a kind of doomsday device that was never meant to be triggered. But Congress failed to substitute other cuts by the end of 2012, forcing the government to wield what the budget office called "a blunt and indiscriminate instrument."


In its place, the Senate plan would use $12 billion in new tax revenue to replace half the expected deficit reduction from the sequester and leave another $12 billion in spending cuts, split half-and-half between defense and domestic programs.


Read more: Medicare patients may suffer if country goes over fiscal cliff


Despite Obama's backing, one leading Senate Democrat warned a deal could run into trouble -- not only from House Republicans who have long opposed any tax increase, but also from liberals in the Senate who oppose allowing more high-income households to escape a tax increase.


"No deal is better than a bad deal, and this looks like a very bad deal the way this is shaping up," Sen. Tom Harkin, D-Iowa, said Monday morning. Late in the day, nothing had changed that would cause him to support the package.


Conservative lobbyist Grover Norquist, whose Americans for Tax Reform pushes candidates to sign a pledge never to raise taxes, said the plan "right now, as explained" would preserve most of the Bush tax cuts and wouldn't violate his group's pledge.


"Take the 84% of your winnings off the table," Norquist told CNN. "We spent 12 years getting the Democrats to cede those tax cuts to the American people. Take them off the table. Then we go back and argue about making the tax cuts permanent for everyone."


But Robert Reich, who served as labor secretary in the Clinton administration, said the $450,000 threshold "means the lion's share of the burden of deficit reduction falls on the middle class, either in terms of higher taxes down the road or fewer government services." In addition, he said, the plan does nothing to raise the federal debt ceiling just as the federal government bumps up against its borrowing limit.


And that, Arizona GOP Sen. John McCain told CNN, is likely to be "a whole new field of battle."


"We just added 2.1 trillion in the last increase in the debt ceiling, and spending continues to go up," McCain said. "I think there's going to be a pretty big showdown the next time around when we go to the debt limit."


CNN's Mike Pearson, Jessica Yellin, Dana Bash, Deirdre Walsh, Lisa Desjardins, Ted Barrett and Ashley Killough contributed to this report.






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Fiscal Cliff Deal Vote Likely in Senate













The so-called "fiscal cliff" came tonight -- but now there is a specific deal on the table to try to soften it after the fact, according to congressional sources.


Senate Majority Leader Harry Reid, D-Nev., said the deal -- brokered by Vice President Joe Biden and Senate Minority Leader Mitch McConnell -- would get a vote in the Senate sometime after midnight. The House would not vote before Tuesday afternoon at the earliest, sources said.


"I feel really very, very good about this vote," Biden told reporters leaving the meeting with Senate Democrats, "but having been in the Senate for as long as I have there's two things you shouldn't do: You shouldn't predict how the Senate is going to vote before they vote....[and] you surely shouldn't predict about how the House is going to vote."


The proposal would extend Bush-era tax cuts permanently for people making less than $400,000 per year and households making less than $450,000, the sources said.


The steep "sequester" budget cuts scheduled to go into effect with the New Year would be postponed two months, said sources. They said half the money would come from cuts elsewhere, and the other half from new revenue.


The deal also would affect taxes on investment income and estates, and extend unemployment benefits for a year, the congressional sources added.


"The end is in sight," said a Democratic aide with Senate Majority Leader Harry Reid's office. "If everyone cooperates, it's possible things can move pretty quickly."


After the Biden meeting, Sen. Charles Schumer, D-N.Y., said there was "strong" support for the plan among Senate Democrats.


"There is a feeling that it's not that this proposal is regarded as great or as loved in any way, but it's a lot better than going off the cliff," he said.


Sen. Dianne Feinstein, D-Calif., called the compromise the "best" that could be done.


Even with progress in the Senate tonight, the "cliff" deadline will pass without action by the House, where Republican leaders said they would "consider" the deal starting tomorrow.








'Fiscal Cliff': Lawmakers Scramble for Last-Minute Deal Watch Video









"Decisions about whether the House will seek to accept or promptly amend the measure will not be made until House members -- and the American people -- have been able to review the legislation," said House Speaker John Boehner, Majority Leader Eric Cantor, Majority Whip Kevin McCarthy, and Republican Conference Chair Cathy McMorris Rodgers in a statement.


The failure of a deal to pass Congress by Jan. 1 technically triggers an income tax hike on all Americans and automatic spending cuts, though lawmakers could still prevent a tax hike by making retroactive any legislation that passes in the weeks ahead, experts said.


The deal at hand will not entirely solve the problem of the "fiscal cliff," however. In fact, it could set up a new showdown over the same spending cuts in just two months that would be amplified by a brewing fight over how to raise the debt ceiling beyond $16.4 trillion. That new fiscal battle has the potential to eclipse the "fiscal cliff" in short order.


Earlier, during a midday news conference, Obama said he was optimistic about compromise in the short-term.


"It appears that an agreement to prevent this New Year's tax hike is within sight, but it's not done," he said. "There are still issues left to resolve, but we're hopeful that Congress can get it done."


In addition to extending current tax rates for households making $450,000 or less, the latest plan would raise the estate tax from 35 to 40 percent for estates larger than $5 million; and prevent the alternative minimum tax from hammering millions of middle-class workers, according to sources familiar with the talks.


Capital gains taxes would rise to 20 percent from 15, according to a senior White House official.


The deal would also extend for one year unemployment insurance benefits set to expire Tuesday, and avert a steep cut to Medicare payments for doctors, congressional sources said.


"I can report that we've reached an agreement on the all the tax issues," said Senate Minority Leader Mitch McConnell in an afternoon speech on the Senate floor.


At the time, McConnell said that federal spending cuts remained a sticking point. That hurdle later appeared to be cleared by postponing the debate two more months, though it is unclear whether House Republicans will go along.


"In order to get the sequester moved, you're going to have to have real, concrete spending cuts," said Rep. Mike Rogers, R-Mich. Without that, he said, "I don't know how it passes the House."


Some Republicans also said Obama unduly complicated progress toward an agreement by seeming to take a victory lap on taxes at his campaign-style event at the White House.


"Keep in mind that just last month Republicans in Congress said they would never agree to raise tax rates on the wealthiest Americans," Obama said, raising the ire of several Republicans. "Obviously, the agreement that's currently discussed would raise those rates, and raise them permanently."


Those words drew a sharp retort from Republican Sen. John McCain.


Rather than staging a "cheerleading rally," McCain said, the president should have been negotiating the finishing touches of the deal.


"He comes out and calls people together and has a group standing behind him, laughs and jokes and ridicules Republicans. Why?" said McCain.


Several Democrats also voiced disappointment with the president and the emerging deal.






Read More..

Today on New Scientist: 28 December 2012







Best videos of 2012: Rare view of Challenger tragedy

Watch a rare amateur video of the Challenger explosion, our most-viewed video of the year



Strong jet stream super-charged US Christmas storms

Record snowfall and dozens of tornadoes snarled holiday travel as a powerful winter storm plowed across much of the US, while rainstorms battered the UK



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The year's biggest stories in life science, including James Cameron's descent into the Mariana trench and efforts to break into Antarctica's buried lakes



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Best videos of 2012: First MRI movie of childbirth

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Fleadom or death: Reviving the glorious flea circus

The parasite-based sideshows were almost done for by the domestic vacuum cleaner - but they are bouncing back, finds Graham Lawton



Approval for gene-modified salmon spawns controversy

Apparently months late, US regulators have declared genetically engineered fish safe to farm and eat, but final approval could be some way off



Best videos of 2012: New aircraft flies inside out

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Read More..

S'pore stocks close lower






SINGAPORE: Share prices in Singapore closed lower in line with other regional markets in a shortened pre-holiday session.

Markets were weighed down by the US fiscal deadlock, as hopes faded that a deal will be reached just a day before the deadline.

The Straits Times Index fell 24.72 points, or 0.77 per cent, to end at 3,167.08.

On the broader market, losers outnumbered gainers by 216 to 175.

Volume totalled 1.54 billion shares valued at S$957.6 million.

Among the declining issues, Great Eastern dropped 18 cents to $15.66, DBS lost 14 cents S$14.84, and SIA also moved down 14 cents to finish at S$10.75.

Ramba Energy rose 21.5 cents to 60 cents, Venture added 6 cents to S$8.06, while City Developments gained 4 cents to S$12.87.

- CNA/al



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Opinion: 12 lessons

















What we learned in 2012


What we learned in 2012


What we learned in 2012


What we learned in 2012


What we learned in 2012


What we learned in 2012


What we learned in 2012


What we learned in 2012


What we learned in 2012


What we learned in 2012








STORY HIGHLIGHTS


  • Dean Obeidallah: You are smarter today than 365 days ago

  • Obeidallah: You probably learned a few Korean words like "Gangnam Style"

  • He says we found out poultry can be a political tool and some people talk to chairs

  • Obeidallah: The good news is that we'll soon forget the inane lessons of 2012




Editor's note: Dean Obeidallah, a former attorney, is a political comedian and frequent commentator on various TV networks including CNN. He is the editor of the politics blog "The Dean's Report" and co-director of the upcoming documentary, "The Muslims Are Coming!" Follow him on Twitter: @deanofcomedy


(CNN) -- You are smarter today than 365 days ago. You know more than you did at the end of 2011.


And here's the kicker, you may not even be aware of how much you learned this past year. It's analogous to how you're affected by the hit songs of boy bands. No matter how much you might try to avoid them, you can't, because these songs are everywhere. Consequently, the words are subtly drilled into your head and the next thing you know, you find yourself unconsciously singing along to the songs when they play on the radio.


So regardless if you were paying attention or not, there's a lot of new information from this past year trapped inside your brain. Here are just some of the things we collectively learned in 2012:



Dean Obeidallah

Dean Obeidallah




1. Mitt Romney had binders full of women


During the second presidential debate, Romney shared with us that when he was governor of Massachusetts, he had binders filled with information about women he was considering hiring. (When I was a teenager, I, too, had binders full of women. But mine I hid under my bed so my mom wouldn't find them.)


2. We picked up some Korean


We're not fluent yet, but thanks to the Korean pop singer PSY and his song "Gangnam Style," we all learned a few Korean words. And because of the song's ubiquitous music video -- which broke the record as the first video to get more than 1 billion views on YouTube -- some of us even have a vague idea of how to do his famous "horse dance."


3. Women love to read "porn"


The runaway hit book, "Fifty Shades of Grey," created a sensation across the country as women -- many over 30 years old -- bought this sexually provocative book, thus coining the term "mommy porn." In contrast, most men are waiting for the movie because we are more traditional in our "porn" tastes.


4. Poultry can be a political tool


Fast food chain Chick-fil-A went from just serving chicken to serving a political message as the head of the company announced publicly that he opposed marriage equality. Consequently, ordering a chicken sandwich at this chain came with a side dish of right-wing politics.


5. Some people talk to chairs


Clint Eastwood taught us at this year's Republican National Convention that you can have a full conversation on national television with your furniture. Hey, Clint made it OK for you to have a conversation with your couch or end table.


6. "James Bond" met the "The Real Housewives"


CIA Director David Petraeus resigned from his job because his extramarital affair was discovered. This is especially shocking because Petraeus' job as the nation's top spy chief was to keep secrets.


7. Cliffs are not just in nature


As we get closer to a precipitous "fiscal cliff" -- a term more overexposed than "Gangnam Style," it seems -- we have all learned that Congress has truly earned its low approval rating -- any lower and certain infectious diseases may become more popular than Congress.


8. What's the big deal with silver?


U.S. Olympian McKayla Maroney made it clear at the London Olympics that she was not impressed by winning the silver medal with her famous "I'm not impressed" face.


9. The way to reduce gun violence is more guns


At least this is what we were told by NRA's Vice President Wayne LaPierre in December as he called for armed guards to be placed in each of the roughly 100,000 public schools in the country.


10. Reality stars are not just for dysfunctional adults


Child star Alana "Honey Boo Boo" Thompson proved that children can be just as self-absorbed and horribly demanding as adult reality show stars.


11. Calendars are not always reliable


The fact you're reading this means that the Mayan apocalypse did not come to pass. That's good news. The bad news is that I now have to pay late fees on the credit cards I didn't pay because I thought there was a chance the Mayans were right.


12. America is the best democracy money can buy


This year's presidential election saw roughly $2 billion spent by the two campaigns and their supporters. That's more than the annual GDP of numerous countries.


You probably recalled more of these things than you guessed you would. While old acquaintances should not be forgot, the good news is that we will likely soon forget the details of the more inane lessons of 2012. Of course, the bad news is that they may be replaced by even more ridiculous ones in 2013.


Follow us on Twitter @CNNOpinion


Join us on Facebook/CNNOpinion


The opinions expressed in this commentary are solely those of Dean Obeidallah.






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Nine killed in Oregon tour bus crash

Updated 9:09 p.m. ET



LA GRANDE, Ore. A tour bus careened through a guardrail along an icy Oregon highway and several hundred feet down a steep embankment Sunday, killing nine people and injuring more than 20 others, authorities said.

The charter bus carrying about 40 people lost control around 10:30 a.m. on the snow- and ice-covered lanes of Interstate 84, according to the Oregon State Police.

The bus came to rest at the bottom of a snowy slope. More than a dozen rescue workers descended the hill and used ropes to help retrieve people from the wreckage in freezing weather. The bus driver was among the survivors, but had not yet spoken to police because of the severity of the injuries the driver had suffered.

Lt. Greg Hastings said the bus crashed along the west end of the Blue Mountains, and west of an area called Deadman Pass. Stretches of highway in the rural and agricultural area of east Oregon tend to be icy in winter months.

The bus slid down the hill and landed upright, with little or no debris visible around the crash site.

St. Anthony Hospital in Pendleton treated 26 people from the accident, including some who were treated and then transported to other medical facilities, said hospital spokesman Larry Blanc.

In addition to the people who were transferred from St. Anthony to La Grand and Hermiston, Ore., and Walla Walla, Wash., Hastings said. Others were taken directly to hospitals further away, including Boise, Idaho, and Portland, Ore.

I-84 is a major east-west highway through Oregon that follows the Columbia River Gorge.

Umatilla County Emergency Manager Jack Remillard said the bus was owned by Mi Joo travel in Vancouver, B.C., and state police said the bus was en route from Las Vegas to Vancouver.

A woman who answered the phone at a listing for the company confirmed with The Associated Press that it owned the bus and said it was on a tour of the Western U.S. She declined to give her name.

A bus safety website run by the U.S. Department of Transportation said Mi Joo Tour & Travel has six buses, none of which have been involved in any accidents in at least the past two years.

The bus crash was the second fatal accident in Oregon on Sunday morning due to icy conditions. A 69-year-old man died in a single-vehicle rollover accident. CBS affiliate KOIN-TV in Portland reports both the 26-year-old driver, who is expected to survive, and the deceased passenger were wearing safety restraints.

Read More..

Hillary Clinton Hospitalized With Blood Clot


gty hillary clinton jt 121209 wblog Hillary Clinton Hospitalized With Blood Clot

(MICHAL CIZEK/AFP/Getty Images)


By DANA HUGHES and DEAN SCHABNER


Secretary Hillary Clinton was hospitalized today after a doctors doing a follow-up exam discovered a blood clot had formed, stemming from the concussion she sustained several weeks ago.


She is being treated with anti-coagulants and is at NewYork-Presbyterian Hospital so that they can monitor the medication over the next 48 hours, Deputy Assistant Secretary Philippe Reines said.


Her doctors will continue to assess her condition, including other issues associated with her concussion. They will determine if any further action is required, Reines said.


Clinton, 65, originally fell ill from a stomach virus following a whirlwind trip to Europe at the beginning of the month, which caused such severe dehydration that she fainted and fell at home, suffering a concussion. No ambulance was called and she was not hospitalized, according to a state department official.


The stomach virus had caused Clinton to cancel a planned trip to North Africa and the United Arab Emirates, and also her scheduled testimony before Congress at hearings on the attack on the U.S. consulate in Benghazi, Libya.


According to a U.S. official, the secretary had two teams of doctors, including specialists, examine her after the fall.  They also ran tests to rule out more serious ailments beyond the virus and the concussion. During the course of the week after her concussion, Clinton was on an IV drip and being monitored by a nurse, while also recovering from the pain caused by the fall.


Medical experts consulted by ABC News said that it was impossible to know for sure the true nature or severity of Clinton’s condition, given the sparse information provided by the State Department. However, most noted that the information available could indicate that Clinton had a deep venous thrombosis,which is a clot in the large veins in the legs.


“A concussion (traumatic brain injury) in itself increases risk of this clot. Likely the concussion has increased her bed rest,” said Dr. Brian D. Greenwald, Medical Director JFK Jonson Rehabilitation Center for Head Injuries. “Immobility is also a risk for DVT. Long flights are also a risk factor for DVT but the recent concussion is the most likely cause.


“Anticoagulants are the treatment,” he said. “If DVT goes untreated it can lead to pulmonary embolism (PE). PE is a clot traveling from veins in legs to lungs which is life threatening. Many people die each year from this.


“Now that she is being treated with blood thinners her risks of PE are decreased,” he said. “Blood thinners carry risk of bleeding but are common and can be safely used.”


Dr. Allen Sills, associate professor of Neurological Surgery at Vanderbilt University Medical Center, said it was most likely that the clot was not located in Clinton’s brain, since she is being treated with anticoagulants.


“This is certainly not a common occurrence after a concussion, and is most likely related to either inactivity or some other injury suffered in the fall,” he said.


Dr. Neil Martin, the head of Neurovascular Surgery at the University of California, Los Angeles, Medical Center, said blood thinners are often given for blood clots in the legs, and it is “very unusual” for anticoagulants to be given for blood clots in the head.


But he cautioned about speculating too much about Clinton’s condition before more information is available.


“If we don’t know where it is, there is the possibility of several different indications,” he said. “I don’t know if there is any connection between what she’s got now and the concussion. All I can tell you is, at this point, it’s almost impossible to speculate unless we know what’s going on there.”

Read More..

Today on New Scientist: 28 December 2012







Best videos of 2012: Rare view of Challenger tragedy

Watch a rare amateur video of the Challenger explosion, our most-viewed video of the year



Strong jet stream super-charged US Christmas storms

Record snowfall and dozens of tornadoes snarled holiday travel as a powerful winter storm plowed across much of the US, while rainstorms battered the UK



2012 review: The year in life science

The year's biggest stories in life science, including James Cameron's descent into the Mariana trench and efforts to break into Antarctica's buried lakes



Superstorm lessons for adapting to climate change

As the post-Sandy rebuild gets under way, coastal cities around the world will be watching



Best videos of 2012: First MRI movie of childbirth

Watch a unique view of a baby's birth, at number 2 in our countdown of the year's top science videos



Fleadom or death: Reviving the glorious flea circus

The parasite-based sideshows were almost done for by the domestic vacuum cleaner - but they are bouncing back, finds Graham Lawton



Approval for gene-modified salmon spawns controversy

Apparently months late, US regulators have declared genetically engineered fish safe to farm and eat, but final approval could be some way off



Best videos of 2012: New aircraft flies inside out

Watch a novel flying machine use a unique mechanism to propel itself, at number 3 in our countdown of the top videos of the year



2012 review: The year in technology

The year's biggest stories in technology, including Kinect devices that may spot signs of autism and controlling a robot by the power of thought



Superdoodles: The science of scribbling

Far from being a distraction, doodling has an important purpose - and you can harness it



2013 Smart Guide: Wave goodbye to the mouse

The Leap, a 3D motion control device set to launch next year, will let you control your computer with touch-free hand and finger movements





Read More..

Suspected norovirus outbreak kills four in Japan hospital






TOKYO: A suspected norovirus outbreak has killed four people and infected almost 100 others at a hospital in the Japanese city of Yokohama south of Tokyo, officials said.

Four patients aged between 80 and 97 died of breathing problems and pneumonia between Wednesday and Friday after suffering vomiting and diarrhoea, officials at the city's Denentoshi Hospital said late Saturday.

A total of 72 patients including the four and 27 hospital staffers have been infected since Tuesday, they said.

The norovirus, which strikes in winter and causes vomiting and diarrhoea, killed six elderly patients at a hospital in Miyazaki in the south and two others at a hospital in the western city of Osaka earlier this month.

It is highly contagious and typically transmitted from person to person.

The virus has been detected in stool samples from 11 of the infected people in Yokohama, the hospital's director Seiji Shibuya told a news conference.

"Many patients are still suffering from the symptoms and we can't see an end to the situation," Shibuya said. "We apologise for our inability to prevent it."

- AFP/ck



Read More..

Fiscal cliff: Nation on edge






STORY HIGHLIGHTS


  • NEW: "We've been in discussions all day and they continue," Sen. McConnell says

  • McConnell and Harry Reid should update their caucuses, perhaps with an agreement, on Sunday

  • There will be major cuts and widespread tax increases without a deal by year's end

  • Some congressmen say Americans have a right to be frustrated by the stalemate




As the fiscal cliff looms, what's your New Year's message to Washington? Go to CNNiReport to share your video.


Washington (CNN) -- The Senate's top Democrat and Republican are working this weekend to forge a compromise to prevent the country from going over the fiscal cliff, the combination of sweeping spending cuts and widespread tax increases that will otherwise take effect in days.


By mid-day Saturday, Senate aides from both parties reported no major developments in the talks. That may not be a bad sign, as a Democratic aide earlier said his side would probably leak a Republican offer it considers "laughable" but would keep it private if the proposals were reasonable.


Senate Minority Leader Mitch McConnell did tell reporters early Saturday evening, "We've been trading paper all day, and the talks continue into the evening."


"We've been in discussions all day and they continue," the Kentucky Republican said. "We'll let you know as soon as we have some news to make."










The Senate aides said they expect no details will be divulged until Sunday afternoon, when McConnell and Senate Majority Leader Harry Reid, D-Nevada, will update their Republican and Democratic caucuses, respectively.


House Republicans will get together sometime early Sunday night, according to a note sent to legislators and staffers. House Speaker John Boehner has called on the Senate to go first, and then his chamber -- which reconvenes Sunday -- will act.


Early Friday evening after a meeting involving President Obama, congressional leaders and top administration officials, the president said he was "modestly optimistic" the Senate leaders would reach an agreement. At the same time, he conceded, "Nobody's going to get 100% of what they want."


The weekend talks are being led by the two senators' chiefs of staff -- David Krone for Reid, and Sharron Soderstrom for McConnell -- communicating largely over the phone and by e-mail, aides said.


Staffers for Boehner, the top man in the Republican-led House of Representatives, won't directly take part in the negotiations, but they'll be kept informed by McConnell's staff, a GOP aide said. From the White House, Obama has been in close contact with negotiators, a senior administration official said Saturday.


Democrats believe Republicans should make the "first move" -- basically by saying how they want to alter the president's proposal, which calls for tax rates to stay the same for all annual family income below $250,000. The expectation is Republicans will try to raise that income threshold to $400,000 and push to keep estate taxes low; Democrats said they might be open to one such scenario, but not both.


If the two sides don't agree on a bill over the weekend, Obama said he wants his latest proposal to be put up for a vote in both the Senate and House. He predicted his plan -- which, in addition to his tax rate proposal, would extend unemployment benefits and "lay the groundwork" for deficit reduction -- would pass in both chambers with bipartisan support.


As members of Congress and their staffs talk, Obama will make his case to the public by appearing Sunday on NBC's "Meet the Press," his first appearance on a Sunday political talk show in three years. The appearance follows his weekly radio address, given Saturday, in which he said it was Republicans' "prerogative" to "let this tax hike hit the middle class," while Republican Sen. Roy Blunt of Missouri countered by accusing Democrats of spending "months drawing partisan lines in the sand."


Reid said, at the very least, that he'd prepare legislation that includes elements favored by Obama for a vote by Monday. Still, he insisted he'd first work with his GOP colleagues.


"I look forward to hearing any good-faith proposals Sen. McConnell has for altering this bill," the Nevada Democrat said.


If no legislation passes both chambers and therefore isn't signed by the president by year's end, the fiscal cliff will go into effect -- something economists warn could trigger a recession.








The lack of political movement thus far, and lack of confidence Washington politicians can get anything done with so little time left, has spurred consumer confidence to sag and stock market values to sink.


Some, like Democratic Sen. Chuck Schumer of New York, expressed cautious optimism Friday that the looming deadline, and the key players renewed engagement, would spur a deal. But others were less optimistic, with Democratic Rep. Jim Moran of Virginia saying Saturday that "I don't think we are going to be able to reach a deal, no matter how small it might be."


Republican Sen. Bob Corker of Tennessee derided the entire process so far as "a total dereliction of duty on every level."


"I've been very surprised that the president has not laid out a very specific plan to deal with this," he said on CBS "This Morning."


"But candidly, Congress should have done the same. And I think the American people should be disgusted."


The principal dispute continues to be over taxes, specifically Democrats' demand to extend most tax cuts passed under President George W. Bush while allowing higher rates of the 1990s to return on top income brackets. During his re-election campaign, Obama said doing so would protect 98% of Americans and 97% of small businesses from tax hikes.


Republicans have opposed any increase in tax rates, and Boehner suffered the political indignity last week of offering a compromise -- a $1 million threshold for the higher rates to kick in -- that his GOP colleagues refused to support because it raised taxes and had no chance of passing the Senate.


Obama and Democrats have leverage, based on the president's re-election last month and Democrats' gains in the House and Senate in the new Congress. In addition, polls consistently show majority support for Obama's position on taxes, and Democrats insist the House would pass the president's plan with Democrats joined by some Republicans if Boehner allowed a vote on it.


However, conservative activist Grover Norquist has vowed to back primary challenges against Republicans who violate his widely signed pledge not to raise taxes. Even if a deal is reached, Norquist has predicted yet more budget showdowns every time the government needs additional money to operate.


The two sides seemingly made progress early last week on forging a $2 trillion deficit reduction deal that included new revenue sought by Obama and spending cuts and entitlement changes desired by Boehner.


Boehner appeared to move on increased tax revenue, including higher rates on top income brackets and eliminating deductions and loopholes. But his inability to rally all House Republicans behind his plan raised questions about his role and what comes next.


The saga has fueled disdain for politicians by many Americans. Such contempt is deserved, said Rep. Steven LaTourette, an Ohio Republican, who is retiring from Congress.


"I think America should be embarrassed by its leadership in D.C.," he told CNN on Friday. "The fact that we have been unable to do things, and instead worried about our next elections. ... I think it's sinful."


What happens to the economy if we go over the cliff?


CNN's Jessica Yellin, Tom Cohen, Dana Bash, Deirdre Walsh, Lisa Desjardins and Kevin Liptak contributed to this report.






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