Hours from "fiscal cliff," Washington still awaits deal

(Reuters) - The U.S. Congress comes back on Monday without a deal to avert the "fiscal cliff" and only a few hours of actual legislative time scheduled in which to act if an agreement materializes.

Negotiations involving Vice President Joe Biden and Senate Republican leader Mitch McConnell appeared to offer the last hope for avoiding the across-the-board tax increases and draconian cuts in the federal budget that will be triggered at the start of the New Year because of a deficit-reduction law enacted in August, 2011.

A jolt from the financial markets could also prod the parties, as it has occasionally in the past.

"I believe investors will show their displeasure" at the lack of progress in Washington, said Mohannad Aama, managing director at Beam Capital Management, an investment advisory firm in New York.

Democratic and Republican leaders in the Senate had hoped to clear the way for swift action on Sunday. But with the two sides still at loggerheads in talks, Senate Democratic leader Harry Reid postponed any possible votes and the Senate adjourned until Monday.

The main sticking point between Republicans and Democrats remained whether to extend existing tax rates for everyone, as Republicans want, or just for those earning below $250,000 to $400,000, as Democrats have proposed.

Also at issue were Republican demands for larger cuts in spending than those offered by President Barack Obama.

Hopes for a "grand bargain" of deficit-reduction measures vanished weeks ago as talks stalled.

While Congress has the capacity to move swiftly when motivated, the leaders of the U.S. House of Representatives and the Senate have left themselves little time for what could be a complicated day of procedural maneuvering in the event of an agreement.

House Speaker John Boehner has insisted that the Senate act first, but that chamber does not begin legislative business until about noon Monday.

OTHER BUSINESS ALSO ON AGENDA

And the cliff is not the only business on the House agenda. Farm-state lawmakers are seeking a one-year extension of the expiring U.S. farm law to head off a possible doubling of retail milk prices to $7 or more a gallon in early 2013.

Relief for victims of Superstorm Sandy is waiting in line in the House as well, though it could still consider a Senate bill on assistance for the storm until January 2, the last day of the Congress that was elected in November 2010.

Expiring along with low tax rates at midnight Monday are a raft of other tax measures effecting tens of millions of Americans.

A payroll tax holiday Americans have enjoyed for two years looks like the most certain casualty as neither Republicans or Democrats have shown much interest in continuing it, in part because the tax funds the Social Security retirement program.

The current 4.2 percent payroll tax rate paid by about 160 million workers will revert to the previous 6.2 percent rate after December 31, and will be the most immediate hit to taxpayers.

A "patch" for the Alternative Minimum Tax that would prevent millions of middle-class Americans from being taxed as if they were rich, could go over the cliff as well. Both Republicans and Democrats support doing another patch, but have not approved one.

At best, the Internal Revenue Service has warned that as many as 100 million taxpayers could face refund delays without an AMT fix. At worst, they could face higher taxes unless Congress comes back with a retroactive fix.

After Tuesday, Congress could move for retroactive relief on any or all of the tax and spending issues. But that would require compromises that Republicans and Democrats have been unwilling to make so far.

Obama said on Sunday he plans on pushing legislation as soon as January 4 to reverse the tax hikes for all but the wealthy.

Finance Ministry to take call on IKEA's FDI proposal tomorrow

NEW DELHI: Government is likely to clear IKEA's proposal to open cafeterias at its proposed mega retail outlets when the Foreign Investment Promotion Board(FIPB) reviews the Swedish furniture major's request tomorrow. 

The FIPB, headed by Economic Affairs SecretaryArvind Mayaram, has already allowed IKEA to invest Rs 4,200 crore to undertake single brand retailing of its products. 

Following a representation from the Swedish firm, theDepartment of Industrial Policy and Promotion (DIPP) had recently forwarded a request to FIPB for reviewing its November 20 decision giving only part approval to IKEA's plan. 

"Review the request of DIPP" regarding IKEA is on the FIPB agenda, sources said. 

Batting for IKEA's proposal, Commerce and Industry Minister Anand Sharma had recently said that government has taken a favourable view on IKEA's request. "All the stores globally whether IKEA or some other single brand retailers, where people shop for long time... There are cafeterias inside. 

"The government has taken...note of the representation that IKEA has made in this regard and a favourable view has been taken so that we accept their global model and the process of FIPB's formal approval is currently underway," he had said. 

Sources said that besides furniture, the Scandinavian firm in its original application had sought government approval to sell items such as textile products, consumer electronics, leather products, lifestyle products, and food and beverages to be served at its restaurants and cafe. 

The company had envisaged an investment of Rs 10,500 crore in single brand retail trading after India allowed 100 per cent FDI in the segment. 

IKEA, the world's largest furniture retailer, operates 336 stores in 44 countries. It plans to set up 10 furnishing and homeware stores as well as allied infrastructure over 10 years in India. Subsequently, it plans to open 15 more stores.

Obama Puts Pressure on GOP in Cliff Talks

WASHINGTON—President Barack Obama sought to increase pressure on Congressional Republicans by attempting to hold them responsible if talks to prevent the so-called fiscal cliff collapse.

Mr. Obama, in an appearance on NBC's "Meet the Press," which was taped Saturday, cast himself as a reasonable broker prepared to make concessions, while depicting GOP leaders as unwilling to let taxes rise on the wealthiest Americans. Many in the GOP make the opposite case, blaming the budget impasse on Democrats, who are blocking any change to the nation's costly entitlement programs.

The president sounded uncertain whether Congress would pass legislation by year's end ...

Global stocks drop, dollar up as "cliff" deadline looms

(Reuters) - World stocks declined, the dollar gained and U.S. shares fell for a fifth day on Friday as the White House and U.S. lawmakers closed in on the "fiscal cliff" deadline with no deal in place.

President Barack Obama and Democratic and Republican lawmakers met Friday as they faced just days to reach a budget deal to avert massive tax increases and spending cuts that could drag the U.S. economy, the world's biggest, into recession.

The two sides are attempting to smooth over sharp differences on raising taxes on the wealthiest Americans and cutting spending on politically sensitive social welfare programs such as Medicare and Medicaid. But investors were skeptical that a deal could be accomplished before the deadline.

The MSCI all-world share index .MIWD00000PUS was down 0.5 percent, and the pan-European FTSEurofirst 300 .FTEU3 ended down 0.6 percent.

In U.S. trading, the Standard & Poor's 500 Index .SPX was down 15.67 points, or 1.11 percent, at 1,402.43, marking a fifth straight decline for the longest losing streak in three months.

The Dow Jones industrial average .DJI was down 158.20 points, or 1.21 percent, at 12,938.11, while the Nasdaq Composite Index .IXIC was down 25.59 points, or 0.86 percent, at 2,960.31.

"There's a pretty good chance that we won't have something in hand by year-end," said Jonathan Golub, chief U.S. equity strategist at UBS, in New York. "It should be pretty obvious that that is now the majority case."

Golub, however, said investors were still counting on a deal that would avoid most of the tax hikes and spending cuts next year even if it does come after the deadline.

Allowing $600 billion of higher taxes and spending cuts to start in January would prevent U.S. debt spilling beyond a $16.4 trillion agreed limit. Analysts fear the measures could wipe as much as 4 percent off the country's growth rate.

Energy companies were among the biggest decliners on Wall Street, with shares of Exxon Mobil (XOM.N) down 2 percent at $85.10 and the S&P energy index .GSPE leading sector losses.

DOLLAR RISES

The U.S. dollar edged up to a two-week high against major currencies as investors waited to see if U.S. politicians can strike a last-minute budget deal.

"Headline risk is likely to remain a driver of FX markets in the near term," said Eric Theoret, FX strategist at Scotia Capital in Toronto.

An agreement on the U.S. budget would be viewed as positive for riskier currencies such as the euro and Australian dollar, while a deadlock is deemed positive for the safe-haven and highly liquid dollar.

Against a basket of currencies at 79.930, the dollar was last up 0.1 percent at 79.665 .DXY.

At the same time, expectations that Japan will inject new stimulus into its economy pushed the yen to yet another two-year low for a third straight day.

The dollar was steady against the yen at 86.06 yen, having earlier risen to 86.63 yen, its strongest since August 2010.

In the U.S. bond market, benchmark Treasury debt prices rose for a third consecutive session on safe-haven buying as the faded hopes for a deal on the fiscal cliff.

Benchmark 10-year notes traded 12/32 higher in price, with yields falling to 1.69 percent, marking the lowest in two weeks and down from 1.73 percent late Thursday. Benchmark notes posted their biggest daily dip in yield in over seven weeks and were down about 8 basis points on the week.

OIL EASES

U.S. February crude slipped 7 cents, or 0.08 percent, to settle at $90.80. Trade was choppy, awaiting news on the U.S. budget talks, but the market was pressured by data showing that fuel stockpiles rose sharply and crude stocks fell less than expected last week.

Brent February crude fell 18 cents, or 0.16 percent, to settle at $110.62.

In other commodity markets, U.S. gold futures for February delivery settled down $7.80, or 0.5 percent, at $1,655.90 an ounce in New York.

Traditionally a safe haven and inflation hedge that investors rush to in times of trouble, gold has lately behaved like a risk asset - often rising and falling with the stock market and sometimes following the dollar.

Obama: Congress must meet fiscal cliff deadline

President Obama used his Saturday radio address toecho his demand that Congress act before the nation falls off a "fiscal cliff" that includes automatic tax hikes and budget cuts.

"You meet your deadlines and your responsibilities every day," Obama told his radio audience. "The folks you sent here to serve should do the same. We cannot let Washington politics get in the way of America's progress."

Obama spoke as Senate Democratic and Republican leaders work this weekend on a package that could be voted on as early as Monday. Any plan must also approved by the Republican-run House.

Tuesday, New Year's Day, marks the start of the fiscal cliff, a series of automatic tax increases and program cuts -- including defense -- that gradually take effect if the parties are unable to reach a new debt reduction agreement. The federal debt now exceeds $16 trillion.

If the Senate cannot strike a deal this weekend, Obama said in his radio speech he will ask the Senate to vote on a "basic package." That plan would maintain unemployment benefits and extend the George W. Bush-era tax cuts for all Americans except those who make more than $250,000 a year.

"I believe such a proposal could pass both houses with bipartisan majorities -- as long as these leaders allow it to come to a vote," Obama said. "If they still want to vote no, and let this tax hike hit the middle class, that's their prerogative. But they should let everyone vote."

In the Republican radio address, Sen. Roy Blunt, R-Mo., said the GOP wants to make sure that a debt reduction doesn't include tax increases that could hurt the economy.

"We still can avoid going over the fiscal cliff if the President and the Democrat-controlled Senate step forward this week and work with Republicans to solve this problem and solve it now," Blunt said.

Senate Majority Leader Harry Reid, D-Nev., and GOP counterpart Mitch McConnell, R-Ky., said they hope to have a plan ready when the Senate and House reconvene Sunday -- two days before New Year's Day and the fiscal cliff deadline. Reid hopes to have a vote on Monday.

India gang-rape suspects to face murder charges

NEW DELHI - Indian police charged six men with murder on Saturday, hours after a woman who was gang-raped and beaten on a bus in New Delhi nearly two weeks ago died in a Singapore hospital.

New Delhi police spokesman Rajan Bhagat said the six face the death penalty if convicted, in a case that has triggered protests across India for greater protection for women from sexual violence, and raised questions about lax attitudes by police toward sexual crimes.

As the body of the 23-year-old student was being readied for the flight from Singapore back to India, police sealed off parts of the capital, New Delhi, and braced for more angry demonstrations like the ones last week, when thousands of Indians - most of them young and furious - poured into the streets to protest against the gang rape of the student.

They were also protesting against rape in general which, they say, often goes unpunished - or the victims are blamed, says correspondent Elizabeth Palmer.

To help restore calm, a clearly rattled Indian Prime Minister Manmohan Singh had to make a statement on national TV.

"I assure you that we will make all possible efforts to ensure security and safety of women in this country," said Singh.

He said he was aware of the emotions the attack has stirred, adding it was up to all Indians to ensure that the young woman's death will not have been in vain.

Widespread public outrage means all eyes are on the police inquiry into the December 16 gang rape, which occurred when the victim and her male friend were picked up by six men joyriding on a bus.

The victim "passed away peacefully" early Saturday at Mount Elizabeth hospital in Singapore with her family and officials of the Indian Embassy by her side, Dr. Kevin Loh, the chief executive of the hospital, said in a statement.

After 10 days at a hospital in New Delhi, the Indian capital, the woman was brought Thursday to Mount Elizabeth, which specializes in multi-organ transplants. Loh said the woman had been in extremely critical condition since Thursday, and by late Friday her condition had taken a turn for the worse, with her vital signs deteriorating.

"Despite all efforts by a team of eight specialists in Mount Elizabeth hospital to keep her stable, her condition continued to deteriorate over these two days," Loh said. "She had suffered from severe organ failure following serious injuries to her body and brain. She was courageous in fighting for her life for so long against the odds, but the trauma to her body was too severe for her to overcome."

The woman and a male friend, who have not been identified, were on a bus in New Delhi after watching a film on the evening of Dec. 16 when they were attacked by six men who raped her. The men beat the couple and inserted an iron rod into the woman's body, resulting in severe organ damage. Both were then stripped and thrown off the bus, according to police.

Indian police have arrested six people in connection with the attack, which left the victim with severe internal injuries, a lung infection and brain damage. She also suffered from a heart attack while in the hospital in New Delhi.

Indian High Commissioner, or ambassador, T.C.A. Raghavan told reporters that the scale of the injuries the woman suffered was "very grave" and in the end "proved too much."

He said arrangements were being made to return her body to India later Saturday.

The frightening nature of the crime shocked Indians, who have come out in the thousands for almost daily demonstrations.

As news of the victim's death reached New Delhi early Saturday, hundreds of policemen sealed off the high-security India Gate area, where the seat of India's government is located, in anticipation of more protests. The area is home to the president's palace, the prime minister's office and key defense, external affairs and home ministries.

The area had seen battles between protesters and police for days after the attack.

Ten metro stations in the vicinity also were closed Saturday, Bhagat said.

Police were allowing people to assemble at the Jantar Mantar and Ramlila grounds, the main areas allotted for protests in New Delhi, he said.

Facebook rings opening bell from headquarters on IPO day

On its IPO day, Facebook rang the opening bell remotely from its headquarters in Menlo Park, Calif. The social network behemoth finished moving onto the 57-acre campus in December. Here’s a look at the massive campus

Molestation charges against Luke Pomersbach: Court to examine CCTV footage from hotel today

New Delhi:  A court in Delhi will examine the CCTV footage from a hotel in the city today to determine whether Luke Pomersbach, the 27-year-old Australian who plays for the Royal Challengers Bangalore, molested a woman and assaulted her fiancé there. Mr Pomersbach has said the charges against him are false. Here are 10 big facts on this case:

1) Mr Pomersbach was arrested on Friday morning by the Delhi Police on charges including "outraging the modesty of a woman". He has been granted interim bail till today.

2) Before leaving court, Mr Pomersbach told reporters that he is "disappointed with the false charges." The judge then asked for CCTV footage from the hotel.

3) The woman who has accused Mr Pomersbach of molesting her is a US citizen named Zohal Hameed. She broke down in court on Friday. Mr Pomersbach fainted for a few seconds in the court-room.

4) The complainant says her fiance, named Sahil Peerzada, lives in Mumbai and that they met Mr Pomersbach at a party on Thursday night at a five-star hotel in Delhi.

5) Mr Peerzada, according to his fiancee, tried to intervene and was attacked by the cricketer. Doctors attending to him at a Delhi hospital say the cartilage in his left ear has been crushed, and he has been operated upon. See photo of Mr Peerzada here.

6) Ms Hameed says the cricketer insisted on "tagging along" with her fiance and her when they decided to go to their room after the party. He then insisted they have a drink with him. When she refused and tried to exit the room, she says he grabbed her.

7) Hotel staff said they believe the couple invited Mr Pomersbach to their suite.

8) The party followed a match which was won by Mr Pomersbach's team against Delhi Daredevils.

9) Sidhartha Mallya, the Director of the Royal Challengers Bangalore, said to NDTV on Friday that he stands by his tweets on the case. Mr Mallya's tweets included references to meeting Ms Hameed at the party. "She was all over me last night and asked for me BBM pin, so if he was her fiance; she wasn't exactly behaving like a future wife." He also said on Twitter, "If Luke is in the wrong, then trust me he will face the necessary sanctions. But what this girl is doing is idiotic."

10) Sidhartha's father, liquor baron Vijay Mallya, speaking to NDTV said that his son is not a child and can defend himself. He also said that Mr Pomersbach will not play in the ongoing IPL tournament till the inquiry against the player is completed. 

Feds respond to Houston judge questioning Obama on health care

In responding to the request of a federal appeals judge in Houston, U.S. Attorney General Eric Holder on Thursday affirmed his department's belief in the time-honored concept of judicial review and said nothing in President Barack Obama's recent comments on a pending Supreme Court decision should be interpreted otherwise.

"Where a plaintiff properly invokes the jurisdiction of a court and presents a justiciable challenge, there is no dispute that courts properly review the constitutionality of Acts of Congress," Holder wrote in a letter to a three-judge panel of the 5th U.S. Circuit Court of appeals that is reviewing a case from East Texas involving an obscure element of the Affordable Care Act, the landmark health care law being challenged as unconstitutional. "The (Justice) Department has not in this litigation, nor in any other litigation of which I am aware, ever asked this or any other court to reconsider or limit long-established precedent concerning judicial review of the constitutionality of federal legislation."

Justice Jerry Smith, a member of the panel, told a government lawyer earlier this week that he was concerned about the president's comments on the upcoming Supreme Court decision and demanded that the Justice Department submit a three-page letter clarifying its position on the role of courts in reviewing federal laws. Smith claimed the president "has troubled many people" with his comment Monday in support of the health care law. "I just remind conservative commentators that for years, what we've heard is, the biggest problem on the bench was judicial activism or a lack of judicial restraint, that an unelected group of people would somehow overturn a duly constituted and passed law," Obama said.

Coast Guard cannon fire sinks Japanese ghost ship

OVER THE GULF OF ALASKA (AP) — The long, lonely voyage of the Japanese ghost ship is over.

A U.S. Coast Guard cutter unleashed cannon fire on the abandoned 164-foot Ryou-Un Maru on Thursday, ending a journey that began when last year's tsunami dislodged it and set it adrift across the Pacific Ocean.

It sank into waters more than 1,000 feet deep in the Gulf of Alaska, more than 150 miles from land.

The crew pummeled the ghost ship with high explosive ammunition, and the Ryou-Un Maru soon burst into flames, and began to take on water and list, officials said.

A huge column of smoke could be seen over the gulf as a Coast Guard C-130 cargo plane, sent to observe the sinking, dropped a buoy to monitor for any possible pollution from the sunken ship.

The Coast Guard warned mariners to stay away, and aviation authorities did the same for pilots.

In about four hours, the ship vanished into the water, said Chief Petty Officer Kip Wadlow in Juneau.

Officials decided to sink the ship rather than risk the chance of it running aground or endangering other vessels in the busy shipping lanes between North America and Asia.

The ship had no lights or communications system, and its tank was able to carry more than 2,000 gallons of diesel fuel. Officials, however, didn't know how much fuel, if any, was aboard.

"It's less risky than it would be running into shore or running into (maritime) traffic," Coast Guard spokesman Paul Webb said.

The National Oceanic and Atmospheric Administration and the Environmental Protection Agency studied the problem and decided it is safer to sink the ship and let the fuel evaporate in the open water.

The ship was at Hokkaido, Japan, and destined for scrapping when a magnitude-9.0 earthquake that struck the country in March 2011 triggered a tsunami.

The waves dislodged the vessel and set it adrift. In total, about 5 million tons of debris was swept out to sea.

The boat did not have any cargo aboard, Webb said. He said he didn't know who owned the Ryou-Un Maru, which had been traveling about 1 mph in recent days.

As the Coast Guard was readying to fire on the vessel, a Canadian fishing vessel, the 62-foot Bernice C, claimed salvage rights over the ghost ship in international waters.

Plans to sink it were halted so the Canadian crew could have a chance to take the stricken ship. A Canadian official with knowledge of the situation told The Associated Press that the Bernice C was unable to tow it.

That delay, in part, prompted the cargo plane to return to Kodiak, Alaska, before the ship sank because the plane burned up fuel while circling the area monitoring the situation.

The Canadian boat left, and once it was about 6 miles from the Japanese vessel, the Coast Guard began to fire, first with 25 mm shells, then a few hours later with ammunition twice that size.

In the year since the tsunami, the debris from Japan has washed up on shores across the Pacific.

In January, a half dozen large buoys suspected to be from Japanese oyster farms appeared at the top of Alaska's panhandle and may be among the first debris from the tsunami.

State health and environmental officials have said there's little need to be worried that debris landing on Alaska shores will be contaminated by radiation.

The earthquake triggered the world's worst nuclear crisis since the Chernobyl accident in 1986.

State officials have been working with federal counterparts to gauge the danger of debris including material affected by a damaged nuclear power plant, to see if Alaska residents, seafood or wild game could be affected.