“Fiscal cliff” struggle prompts Republican infighting

(Reuters) – Republicans in the Congress attacked each other on Tuesday over their leadership’s “fiscal cliff” offer to Democratic President Barack Obama as a group of governors visited the White House to voice concern about the impact on the states of the year-end tax-and-spending deadline.

The disarray in Republican ranks over how far to compromise the party’s anti-tax stance could complicate what are expected to be intense negotiations between House Speaker John Boehner and Obama. Each will need the backing of their respective troops in Congress in order to bargain credibly.

The fiscal cliff refers to steep tax increases and deep automatic spending cuts slated to start to take effect on New Year’s Day. If Congress and Obama do not act to stop them, economists have warned the U.S. economy could be thrown back into recession.

The disagreements among Republicans surfaced as negotiations on a deficit reduction plan designed to supplant and avert the automatic cuts and tax hikes got more serious, with both parties having presented opening offers.

Senator Jim DeMint, a South Carolinian with a following among small-government conservatives, lashed out at an offer sent on Monday to Obama by Boehner, a fellow Republican.

“Speaker Boehner‘s $ 800 billion tax hike will destroy American jobs and allow politicians in Washington to spend even more,” DeMint said in a statement.

In the House of Representatives, two first-term Republican Tea Party stalwarts – Tim Huelskamp of Kansas and Justin Amash of Michigan – were removed by party leadership from the powerful budget committee in what Huelskamp called “a vindictive move.”

The Republican leadership offered no immediate explanation for the unusual action, but Boehner has had problems bringing in line the large Tea Party wing in the House. Elected to Congress in force in 2010, they regard the speaker as too much of a compromiser and tied his hands during talks in 2011 on raising the debt ceiling.

“The GOP leadership might think they have silenced conservatives, but removing me and others from key committees only confirms our conservative convictions,” said Huelskamp.

Washington interest groups are now fully consumed by the cliff, and some are in a bit of a panic about what the talks might bring.

Tensions erupted on Tuesday at a forum convened by a fiscal responsibility group called Fix the Debt, which seeks to reduce the federal government’s debt and includes a range of business, think tank and political leaders.

Audience members stood and repeatedly interrupted Republican Senator Rob Portman of Ohio as he attempted to make a speech. They urged protections from cuts for the Social Security and Medicare social safety net programs.

Others shouted down the protesters until they marched out of the forum, where Democratic Senate Finance Committee Chairman Max Baucus also made remarks.

U.S. stock markets opened slightly higher, with the benchmark Dow Jones industrial average up less than 1 percent after weeks of gyrations tied to the debate on Capitol Hill.

GOP OFFER MADE

In an important step, Boehner on Monday called for steep spending cuts, but gave no ground on Obama’s proposal to raise tax rates on the wealthiest Americans.

The central dispute between the two parties has been what to do about low individual income tax rates that will expire at year-end. The low rates were first signed into law a decade ago by former President George W. Bush.

Obama wants to extend the low rates for 98 percent of taxpayers, but not for the top 2 percent. Republicans have insisted that the low tax rates be extended for the wealthy as well.

The White House dismissed Boehner’s proposal within an hour of its being made public, the same treatment Republicans gave Obama’s deficit reduction plan offered last week.

While the offers and counter-offers between Republicans and Democrats may ultimately create the conditions for actually getting in a room together and bargaining at length, so far the moves have been out in public and mostly for show.

Washington is awash in competing plans to cut the federal deficit. A think tank with ties to the Obama administration laid out another plan on Tuesday, urging the president to go bold and seek more concessions from Republicans on tax hikes.

(Reporting by Thomas Ferraro, David Lawder, Kim Dixon, Fred Barbash, Rachelle Younglai; Editing by Jackie Frank)

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Officials: NATO to decide on missiles for Turkey

BRUSSELS (AP) — NATO foreign ministers are expected to approve Turkey‘s request for Patriot anti-missile systems to bolster its defense against possible strikes from neighboring Syria.

NATO foreign ministers are meeting on Tuesday and Wednesday in Brussels. Parliaments in both nations must approve the deployment, which would also involve several hundred soldiers.

Ankara, which has been highly supportive of the Syrian opposition, wants the Patriots to defend against possible retaliatory attacks by Syrian missiles carrying chemical warheads. NATO leaders have repeatedly said they would provide any assistance Turkey needs.

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Swiss spy agency warns U.S., Britain about huge data leak

ZURICH (Reuters) – Secret information on counter-terrorism shared by foreign governments may have been compromised by a massive data theft by a senior IT technician for the NDB, Switzerland‘s intelligence service, European national security sources said.

Intelligence agencies in the United States and Britain are among those who were warned by Swiss authorities that their data could have been put in jeopardy, said one of the sources, who asked for anonymity when discussing sensitive information.

Swiss authorities arrested the technician suspected in the data theft last summer amid signs he was acting suspiciously. He later was released from prison while a criminal investigation by the office of Switzerland’s Federal Attorney General continues, according to two sources familiar with the case.

The suspect’s name was not made public. Swiss authorities believe he intended to sell the stolen data to foreign officials or commercial buyers.

A European security source said investigators now believe the suspect became disgruntled because he felt he was being ignored and his advice on operating the data systems was not being taken seriously.

Swiss news reports and the sources close to the investigation said that investigators believe the technician downloaded terrabytes, running into hundreds of thousands or even millions of printed pages, of classified material from the Swiss intelligence service’s servers onto portable hard drives. He then carried them out of government buildings in a backpack.

One of the sources familiar with the investigation said that intelligence services like the U.S. Central Intelligence Agency and Britain’s Secret Intelligence Service, also known as MI6, routinely shared data on counter-terrorism and other issues with the NDB. Swiss authorities informed U.S. and British agencies that such data could have been compromised, the source said.

News of the theft of intelligence data surfaced with Switzerland’s reputation for secrecy and discretion in government and financial affairs already under assault.

Swiss authorities have been investigating, and in some cases have charged, whistleblowers and some European government officials for using criminal methods to acquire confidential financial data about suspected tax evaders from Switzerland’s traditionally secretive banks.

The suspect in the spy data theft worked for the NDB, or Federal Intelligence Service, which is part of Switzerland’s Defense Ministry, for about eight years.

He was described by a source close to the investigation as a “very talented” technician and senior enough to have “administrator rights,” giving him unrestricted access to most or all of the NDB’s networks, including those holding vast caches of secret data.

Swiss investigators seized portable storage devices containing the stolen data after they arrested the suspect, according to the sources. At this point, they said, Swiss authorities believe that the suspect was arrested and the stolen data was impounded before he had an opportunity to sell it.

However, one source said that Swiss investigators could not be positive the suspect did not sell or pass on any of the information before his arrest, which is why Swiss authorities felt obliged to notify foreign intelligence partners their information may have been compromised.

Representatives of U.S. and British intelligence agencies had no immediate response to detailed queries about the case submitted by Reuters, although one U.S. official said he was unaware of the case.

SECURITY PROCEDURES QUESTIONED

Swiss Attorney General Michael Lauber and a senior prosecutor, Carolo Bulletti, announced in September that they were investigating the data theft and its alleged perpetrator. A spokeswoman for the attorney general said she was prohibited by law from disclosing the suspect’s identity.

A spokesman for the NDB said he could not comment on the investigation.

At their September press conference, Swiss officials indicated that they believed the suspect intended to sell the data he stole to foreign countries. They did not talk about the possible compromise of information shared with the NDB by U.S. and British intelligence.

A European source familiar with the case said it raised serious questions about security procedures and structures at the NDB, a relatively new agency which combined the functions of predecessor agencies that separately conducted foreign and domestic intelligence activities for the Swiss government.

The source said that under the NDB’s present structure, its human resources staff – responsible for, among other things, ensuring the reliability and trustworthiness of the agency’s personnel – is lumped together organizationally with the agency’s information technology division. This potentially made it difficult or confusing for the subdivision’s personnel to investigate themselves, the source said.

According to the source, investigators now believe that in the months before his arrest, the data theft suspect displayed warning signs that should have been spotted by his bosses or by security officials.

The source said that the suspect became so disgruntled earlier this year that he stopped showing up for work.

However, according to Swiss news reports, the NDB did not realize that something was amiss until the largest Swiss bank, UBS, expressed concern to authorities about a potentially suspicious attempt to set up a new numbered bank account, which then was traced to the NDB technician.

A Swiss parliamentary committee is now conducting its own investigation into the data theft and is expected to report next spring. Investigators are known to be concerned that the NDB lacks investigative powers, such as to search premises or conduct wiretaps, which are widely used by counter-intelligence investigators in other countries.

(Reporting by Mark Hosenball; Editing by Mark Heinrich)

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GOP senator: Boehner’s budget proposal ‘will destroy American jobs’

South Carolina Republican Sen. Jim DeMint (Win McNamee/Getty Images)

WASHINGTON—South Carolina Republican Sen. Jim DeMint just gave Democrats a shiny new talking point.

The tea party-backed senator on Tuesday slammed House Republican leaders for the fiscal cliff proposal they offered earlier this week.

"Speaker [John] Boehner's $800 billion tax hike will destroy American jobs and allow politicians in Washington to spend even more, while not reducing our $16 trillion debt by a single penny," DeMint said in a statement. "This isn't rocket science. Everyone knows that when you take money out of the economy, it destroys jobs, and everyone knows that when you give politicians more money, they spend it. This is why Republicans must oppose tax increases and insist on real spending reductions that shrink the size of government and allow Americans to keep more of their hard-earned money."

Republican House leaders on Monday sent a letter to the White House with a plan to avoid a series of automatic tax increases and spending cuts set to begin on Jan. 1, 2013. With a 10-year price tag of about $2.2 trillion, the Republican proposal would raise federal revenue by closing loopholes and capping deductions within the tax code and making changes to entitlement programs. The letter was signed by seven House leaders, including Budget Committee Chairman Paul Ryan of Wisconsin and Ways and Means Committee Chairman Dave Camp of Michigan.

Democrats dismissed it quickly, calling for a bill that would increase taxes on households earning more than $250,000 per year and more federal spending on infrastructure, which were not included in the Republican plan.

DeMint's comment may be a bit of a sideshow—he's not directly involved in the negotiations and he represents just a single vote in Congress—but it's representative of how conservatives feel about the Republican proposal, and it offers ample ammunition to President Barack Obama and Democrats in the fiscal cliff media relations war.

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Howard Stern signs on for more “America’s Got Talent”

LOS ANGELES (Reuters) – Shock jock Howard Stern will return as a judge for his second season on NBC‘s summer talent show “America’s Got Talent,” the broadcaster said on Monday, although the high-priced radio host appears to have done little to improve the show’s ratings.

NBC hoped Stern, 58, known for this sexually explicit radio interviews, would attract bigger audiences, but the finale in September was watched by a record low of under 11 million viewers, according to ratings data.

“Howard Stern’s towering presence and opinions on last season’s show as a new judge made a dramatic impact and added a sharper edge to the fascinating developments on stage,” Paul Telegdy, president of alternative programming at NBC, said in a statement.

The show, which also features celebrity judges Sharon Osbourne and Howie Mandel, remained the top-rated summer series among adults aged 18-49, the demographic most coveted by advertisers.

NBC attributed the overall 2012 audience decline partly to an earlier start that pitted “Got Talent” against end-of-season original programming in May.

The network is still searching for a replacement for Osbourne, who has quit in a dispute with NBC over their decision to drop her son Jack from another reality show.

Unlike popular singing competitions “The Voice,” “The X Factor” and “American Idol,” “America’s Got Talent” is open to dancers, comics, dancers and other performers. It is produced by “The X Factor” creator and judge Simon Cowell.

Stern is noted for his say-anything and do-anything radio program but he toned down his act when he started appearing as a judge on the show.

(Reporting by Eric Kelsey; Editing by Jill Serjeant)

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Merck starts new trial to test Alzheimer’s drug

(Reuters) – Merck & Co Inc has started a new trial of its experimental Alzheimer’s drug, the first mid-stage clinical trial of a promising new class of oral medicines that has the potential to shut down the production of a protein that many researchers believe is the primary cause of the disease.

The drugmaker said on Monday it had started the trial to evaluate the safety and effectiveness of the drug, MK-8931, in patients with mild-to-moderate Alzheimer’s disease.

The Phase II trial, which will compare the drug with a placebo, is a global, multi-center study that includes a group of 200 patients to test safety. The study is expected to eventually enroll up to 1,700 patients in the main Phase III trial.

The drug is the first of its kind to advance to this stage of clinical research.

Eli Lilly and Co is considered the front runner in Alzheimer’s research after its drug solanezumab, in a Phase III trial, was shown in August to slow down cognitive declines in patients with mild symptoms of Alzheimer’s disease. However, the drug failed its overall goal of delaying cognitive and physical decline in patients with mild to moderate Alzheimer’s.

The start of Merck’s new trial of MK-8931 could put the company on an equal footing with Lilly in the race for the first approved drug to delay the progress of the disease.

The Lilly drug is administered intravenously, while the Merck drug is taken orally.

Merck’s drug appears to almost entirely prevent the formation of new beta-amyloid, the toxic proteins that lead to plaques in the brain, while the Lilly drug acts by removing existing plaques, according to Mark Schoenebaum, an analyst with ISI Group. Amyloid plaques are linked to Alzheimer’s disease.

“We do not believe that Merck has any clinical efficacy data at this point upon which it is basing its Phase II/III ‘go’ decision. Thus, one must still view the Phase III as highly speculative,” Schoenebaum wrote in a research note.

Assuming the U.S. Food and Drug Administration asks Lilly to do another confirmatory Phase III trial on its drug, the Merck drug is on roughly the same timeline to potential approval as the Lilly drug, he said.

If the FDA approves the Lilly drug on its existing data, something Schoenebaum thinks is unlikely, then Lilly would be about three years ahead, he added.

Merck shares were up 30 cents to $ 44.60 in morning trade on the New York Stock Exchange, while Lilly shares were down 10 cents to $ 48.94.

Earlier this year, Roche Holding AG more than doubled the size of a clinical trial of its experimental Alzheimer’s drug gantenerumab in patients who have early Alzheimer’s but have not yet developed dementia, putting it in the vanguard of attempts to catch the disease in its early stages.

A successful Alzheimer’s treatment could reap billions of dollars in annual sales. But many experts believe treatment must be delivered before patients show signs of dementia because brain damage may be irreversible after that point.

(Reporting by Debra Sherman in Chicago and Ransdell Pierson in New York; Editing by Gerald E. McCormick and John Wallace)

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Gunmen assassinate peasant leader in Paraguay

ASUNCION, Paraguay (AP) — Gunmen murdered one of the surviving leaders of a peasant movement whose land dispute with a powerful politician prompted the end of Fernando Lugo‘s presidency last June.

Vidal Vega, 48, was hit four times early Saturday by bullets from a 12-gauge shotgun and a .38-caliber revolver fired by two unidentified men who sped away on a motorcycle, according to an official report prepared at the police headquarters in the provincial capital of Curuguaty.

A friend, Mario Espinola, told The Associated Press that Vega was shot down when he stepped outside to feed his farm animals.

Vega was among the public faces of a commission of landless peasants from the settlement of Yby Pyta, which means Red Dirt in their native Guarani language.

He had lobbied the government for many years to redistribute some of the ranchland that Colorado Party Sen. Blas Riquelme began occupying in the 1960s.

By last May, the peasants finally lost patience and moved onto the land. A firefight during their eviction on June 15 killed 11 peasants and six police officers, prompting the Colorado Party and other leading parties to vote Lugo out of office for allegedly mismanaging the dispute.

Twelve suspects, nearly all of them peasants from Yby Pyta, have been jailed without formal charges since then on suspicion of murdering the officers, seizing property and resisting authority. The prosecutor had six months to develop the case and will present his findings Dec. 16.

Vega was expected to be a witness at the criminal trial, since he was among the few leaders who weren’t killed in the clash or jailed afterward.

He wasn’t charged because he was away getting supplies when the violence erupted at the settlement erected by the peasants inside Riquelme’s ranch, the Naranjaty Commission’s secretary, Martina Paredes, told the AP.

“We think he was assassinated by hit men who were sent, we don’t know by whom, perhaps to frighten us and frustrate our fight to recover the state lands that were illegally taken by Riquelme,” she said.

Riquelme, who died of natural causes about a month after the battle in June, occupied the land during the dictatorship of Alfredo Stroessner, whose government gave away land for free to anyone willing to put it to productive use.

A local court in Curuguaty upheld Riquelme’s claim to the land years later. Lugo’s government later sought to overturn the decision, but the case remains tied up in court.

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Nokia debunks rumor that it may be considering shift to Android

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Duke and Duchess of Cambridge expecting a baby

LONDON (Reuters) - Britain's Prince William and his wife Catherine are expecting a baby, destined to be the country's future monarch, the prince's office said on Monday.

"Their Royal Highnesses The Duke and Duchess of Cambridge are very pleased to announce that The Duchess of Cambridge is expecting a baby," the office said in a statement.

"The Queen, The Duke of Edinburgh, The Prince of Wales, The Duchess of Cornwall and Prince Harry and members of both families are delighted with the news."

The couple, officially known as the Duke and Duchess of Cambridge, married in April last year, prompting a global media frenzy and there has been much speculation, particularly in U.S. gossip magazines, about a possible pregnancy.

The statement said Catherine was in the King Edward VII Hospital in Central London suffering from very acute morning sickness. She is likely to remain there for several days.

It said her condition required supplementary hydration and nutrients. There was no detail about when the baby was due, with the statement stating the pregnancy was in its early stages.

"I'm delighted by the news that the Duke and Duchess of Cambridge are expecting a baby," Prime Minister David Cameron said on his Twitter website. "They will make wonderful parents."

William, Queen Elizabeth's grandson, is second in line to the British throne, and their first child will become the third in succession when he or she is born.

Last year Britain and other Commonwealth countries which have the queen as their monarch agreed to change the rules of royal succession so that sons would no longer have precedence as heir, regardless of age.

The agreement also means an end to a ban on a future monarch marrying a Catholic, a stipulation dating back some 300 years.

William and Catherine currently live in north Wales where the prince is based as a Royal Air Force search and rescue pilot.

(Reporting by Michael Holden)

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Led Zeppelin will Reunite – for “Letterman” interview

LOS ANGELES (TheWrap.com) – The surviving members of Led Zeppelin will make a rare appearance together on “Late Show With David Letterman” on December 3, CBS said Friday.

Jimmy Page, Robert Plant and John Paul Jones will drop in on the late-night show for an interview – which isn’t quite the reunion that Zep fans have been patiently waiting for, but it might have to do. With the exception of a one-off tribute concert for Atlantic Records founder Ahmet Ertegun at London’s O2 Arena in 2007 – which was released as the DVD “Celebration Day” in October – Jones has largely been estranged from Page and Plant since the group’s 1980 breakup following drummer John Bonham‘s death.

The “Late Show” appearance won’t be the only time that Letterman hangs out with the rock legends – the group, along with Letterman, will be lauded at the 35th Annual Kennedy Center Honors in Washington, D.C., which will take place December 2 and air December 26 on CBS.

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