Danny Puff

PORTLAND, Oregon (Reuters) - Oregon authorities said on Tuesday they have managed to positively identify one of nine people killed Sunday morning after a charter bus skidded off an icy mountain highway and crashed down an embankment.

Identification of the victims has been complicated because some were foreign nationals, said Eugene Gray, forensic administrator for the Oregon State Medical Examiner's Office.

The Korean Consulate in Seattle, Wash. sent a team to work with investigators, since many of the 47 people on the bus were of Korean origin and citizens of Korea.

Some other passengers were Canadian and others were from the United States.

"We do positive identifications with fingerprints, dental records and DNA," Gray told Reuters. "None of this is available to us. We don't know how long it will take. We have to wait until we're provided the information."

The lone identification provided by authorities so far is that of Dale William Osborn, 57, from Spanaway, Washington, who was killed in the crash, officials said in a press release Tuesday.

His wife, 65 year-old Darlene Sue Osborn, was being treated at St. Anthony Hospital, Pendleton.

The Oregon State Police said on Tuesday that one of the people killed in the crash may be a juvenile female. Of the nine people killed, four are male and five are female.

The tour bus veered off an icy highway on Sunday morning, crashed through a guardrail and plunged 200 feet down an embankment, killing nine and injuring most of the other 38 people on board.

The injured were taken to 10 hospitals in three states and at least nine remained hospitalized on Tuesday.

Of the 26 people transported to St. Anthony Hospital in Pendleton, Oregon, five of the most severely injured were stabilized and transported to hospitals better equipped to treat them.

Tuesday, St. Anthony had five patients remaining, all in fair condition, said Larry Blanc, director of communications.

Four of the patients transferred to Oregon Health & Science University Hospital in Portland remained there on Tuesday, a spokeswoman said.

Oregon State Police and the National Transportation Safety Board are combing through evidence and interviewing passengers and the driver to try to determine the cause of the crash.

(Editing by Dan Whitcomb and David Gregorio)

Read More

SANTA ANA, Calif. (AP) New and expanded sections to cover business, automobiles and food. A nearly five-fold increase in community news pages and more investigative reporting. Even daily color comics.

It feels like a throwback to an earlier era at the Orange County Register, where a first-time newspaper owner is defying conventional wisdom by spending heavily to expand the printed edition and playing down digital formats.

Aaron Kushner added about 75 journalists and, with 25 more coming, will have expanded the newsroom by half since his investment group bought the nation's 20th-largest newspaper by circulation in July.

Changes also include thicker pages with triple the number of colors to produce razor-sharp photos and graphics. By the end of March, the newspaper will have 40 percent more space than under previous owners, Freedom Communications Inc.

Kushner, 39, believes people will pay for high-quality news. His bet is remarkable in an industry where newspapers have shrunk their way to profits for years, slashing costs while seeking clicks on often-free websites to attract online advertising.

As more newspapers begin charging for online access, Kushner's spending spree is drawing close attention.

"If he's successful, it's going to show the way for other papers to follow," said Walter E. Hussman Jr., publisher of the Arkansas Democrat-Gazette and an early advocate of charging readers for online access.

Seated behind his large, clutter-free desk near shelves stacked with newspapers, the former Stanford University gymnast said his lack of industry experience may be a plus because he hasn't been through the tough times in newspapering.

"So when we sit down and look at what's possible, our view of the world is different," Kushner said. "We're a little crazy in that we really do believe that we can grow this particular newspaper."

It's too early to know whether he's right. Kushner said advertising revenues have grown, though he won't say how much.

Average daily circulation rose 5.3 percent as of Sept. 30 from a year earlier to 285,088 on weekdays and 387,547 on Sundays, bucking an industry decline of 0.2 percent, according to the Alliance for Audited Media.

One key test will be when the Register begins charging for online access sometime before the end of March. He said readers will pay the same as the print edition a contrast to publications that charge online subscribers substantially less.

"If you have a wonderful restaurant and it cost $10 to come in the front door, I've never understood why it should cost anything less to come through a side door," he said.

"The value of the journalism isn't any less. The reporter isn't paid any less. The photographer isn't paid any less."

Kushner, who has a master's degree in organizational analysis, founded a business in the 1990s that allowed people to change their addresses online and later owned and managed a greeting-card company for seven years.

In 2010, he started an investors group, 2100 Trust LLC, to scout for newspapers, flirting with The Boston Globe and later with MaineToday Media Inc., publisher of The Portland Press Herald.

Tom Bell, president of The Portland Newspaper Guild, said Kushner presented the union with 50 demands, including a longer work week and increases in employee health care contributions.

"We got off to such a bad start that it was hard to recover," said Bell, who is skeptical of that Kushner's print bet will succeed.

Kushner settled on Freedom and its 107-year-old flagship paper, the Register, for an undisclosed sum. The newspaper serves affluent, growing, well-educated and ethnically diverse communities near Los Angeles, bolstered by 24 community publications.

Kushner became Freedom's chief executive and the Register's publisher, working five days a week at the company's Santa Ana headquarters and flying cross-country to his wife and three children in the Boston area.

Many executives stayed put, including the top editor, Ken Brusic, who joined the Register in 1989.

The newsroom is nearing 300 employees, including about 40 year-round interns who are paid $10 an hour and provided housing. The new owners eliminated 401(k) matches at the non-union newspaper and have resisted pay raises.

Like other newspapers, the Register experimented over the last decade as its circulation tumbled 40 percent and the newsroom shrank in half. A tabloid paper featuring snappier stories failed, as did a weekly entertainment publication.

Reporters got ever-rising numerical targets to generate Web traffic, with constant reminders of how they fared against peers. "It was more like a sales floor than a newsroom," columnist Frank Mickadeit wrote in a recent piece hailing the Register's "reawakening."

To focus more on the print edition, the Register slashed the number of blogs from around 40 to less than a dozen. It scrapped an iPad application for news, traffic and weather.

The new owners have introduced a daily page for coverage of a major development, began sending a reporter and photographer to every one of the region's 50 high school football games on Fridays and doubled editorial pages.

Reporters have been encouraged to dig deeper and expand sources. "It's a new experience for (a publisher) to say, 'Are you sure you have enough investigative reporters? I think you ought to hire more,'" Brusic said.

The Register's editorial page once a strong libertarian voice didn't endorse for president in November. Kushner has contributed to Democrats such as Barack Obama and Joe Biden and moderate Republicans, including Sen. Susan Collins of Maine.

Kushner declined to discuss his political views and said they are separate from his work at the Register.

He is looking to buy more newspapers, telling Register staff last year that he had a list of 15 that fit his criteria. In an interview, he expressed interest in Tribune Co. newspapers, which include the Chicago Tribune, Los Angeles Times and Baltimore Sun.

Some readers and employees question how much the new owners will stomach if growth stalls. Kushner insisted he is committed, saying the Register has a strong balance sheet and doesn't answer to shareholders seeking quick returns.

"If you don't have a clear tangible way to grow revenue you only have one alternative and that's to cut costs," he said. "That path may well work. That's not the path that we're on here."

Read More

PASADENA, Calif. (AP) The 124th Rose Parade in Pasadena kicked off on a chilly New Year's morning with the theme "Oh the Places You'll Go!" named in honor of the Dr. Seuss book.

Led by this year's grand marshal, British primatologist Jane Goodall, the parade features 42 floats covered with flowers and plant material, 23 marching bands and 21 equestrian units from across the country.

An estimated 700,000 spectators are lining the streets to view the 5-mile-long spectacle, which is broadcast around the world. This year's parade features the first-ever float entered by the Defense Department and a couple getting married on a float.

The $247,000 military float is a replica of the Korean War Veterans Memorial in Washington to commemorate the veterans from that conflict.

The float that scooped up the parade's grand "Sweepstakes" prize for the most beautiful floral presentation and design was "Dreaming in Paradise" by fruit and vegetable producer Dole.

Die-hard parade fans staked out their spots early Monday with folding chairs, hammocks and portable barbeque grills.

They brought in the new year by throwing marshmallows, shaving cream and tortillas, and then hunkered down to stay warm in sleeping bags during a particularly cold night for Southern California.

The wave of under-40-degree temperature spurred a number of cold-weather exposure calls to emergency personnel, police department spokeswoman Lisa Derderian told City News Service.

As of 8 a.m. Tuesday, police had made a total of 22 arrests along the parade route since 6 p.m. Monday, said police Lt. Rick Aversan.

All but one arrest were for public intoxication. The other was for possession of burglary tools that could have been used to break into cars, police said.

Read More

LOS ANGELES (AP) Growing concern that problems with the new electronic Oscar voting system could lead to record-low turnout has prompted the motion picture academy to extend the deadline for members to vote for Oscar nominations.

But next week's highly anticipated announcements looming, the extension is only for a day, until Friday. The Academy of Motion Picture Arts and Sciences said Monday any votes received after the new deadline will not be counted.

"By extending the voting deadline we are providing every opportunity available to make the transition to online balloting as smooth as possible," said the academy's chief operating officer, Ric Robertson, in a statement. "We're grateful to our global membership for joining us in this process."

Reports of difficulty accessing the Oscars' first-ever online voting system and fears that it could be hacked have raised questions about balloting for the 85th annual contest. Earlier this year, the academy and its longtime accountants, PricewaterhouseCoopers, partnered with the electronic voting firm Everyone Counts Inc. to develop the system.

"There's considerable concern from many members that voter participation will be at record lows this year because the people who wanted to take a chance on this new cutting-edge system are either giving up on it or worried they won't be able to cast their votes," said Scott Feinberg, awards analyst and blogger for The Hollywood Reporter.

In the past, Oscar voting has been compiled strictly through paper ballots sent through the mail. The new system allows members to choose between voting online or sticking with a traditional mail-in ballot.

Morgan Spurlock, the documentary filmmaker whose 2004 film "Super Size Me" was nominated for best documentary, posted on Twitter last week that he wasn't able to log on to vote electronically and his ballot was instead mailed to him.

"The password they sent didn't work for my log-in and they couldn't email me a new log-in, only snail mail," tweeted the 42-year-old director.

The academy said it has made several voting resources available to members, including assisted voting stations in Los Angeles, New York and London, and a 24-hour support line.

A spokesman for Everyone Counts didn't immediately respond to a request seeking comment.

Besides online voting, a retooled nomination period could also affect the competition.

Organizers moved up the unveiling of the Oscar nominations to Jan. 10. That change puts the announcement three days before Hollywood's second-biggest awards ceremony, the Hollywood Foreign Press Association's Golden Globes, which are scheduled for Jan. 13.

Oscar overseers originally said the switcheroo would give the academy's nearly 6,000 members more time to see nominated films before the Feb. 24 awards ceremony, but Feinberg of The Hollywood Reporter noted that the change gave voters less time to see potential contenders during the first phase of voting, when members decide on nominees.

"If the turnout is lower among older members, more traditional Oscar contenders will probably receive fewer votes, and otherwise edgier films that appeal more to younger people could fare better," said Feinberg. "Because of the way that best-picture voting works, it could increase the chances of a movie like 'The Master' or 'Moonrise Kingdom' getting in."

Ultimately, because of the inherent secrecy involved in selecting Oscar winners, Feinberg said it will be impossible to know what affects if any this year's voting changes have on the ceremony, where as many as 10 films could be vying for the best-picture award.

___

Online:

http://www.oscars.org

___

Follow AP Entertainment Writer Derrik J. Lang on Twitter at http://www.twitter.com/derrikjlang.

Read More

WASHINGTON (AP) Doctors treating Secretary of State Hillary Rodham Clinton for a blood clot in her head said blood thinners are being used to dissolve the clot and they are confident she will make a full recovery.

Clinton didn't suffer a stroke or neurological damage from the clot that formed after she suffered a concussion during a fainting spell at her home in early December, doctors said in a statement Monday.

Clinton, 65, was admitted to New York-Presbyterian Hospital on Sunday when the clot turned up on a follow-up exam on the concussion, Clinton spokesman Phillipe Reines said.

The clot is located in the vein in the space between the brain and the skull behind the right ear. She will be released once the medication dose for the blood thinners has been established, the doctors said.

In their statement, Dr. Lisa Bardack of the Mount Kisco Medical Group and Dr. Gigi El-Bayoumi of George Washington University said Clinton was making excellent progress and was in good spirits.

Clinton's complication "certainly isn't the most common thing to happen after a concussion" and is one of the few types of blood clots in the skull or head that are treated with blood thinners, said Dr. Larry Goldstein, a neurologist who is director of Duke University's stroke center. He is not involved in Clinton's care.

The area where Clinton's clot developed is "a drainage channel, the equivalent of a big vein inside the skull. It's how the blood gets back to the heart," Goldstein said.

Blood thinners usually are enough to treat the clot and it should have no long-term consequences if her doctors are saying she has suffered no neurological damage from it, Goldstein said.

Clinton returned to the U.S. from a trip to Europe, then fell ill with a stomach virus in early December that left her severely dehydrated and forced her to cancel a trip to North Africa and the Middle East. Until then, she had canceled only two scheduled overseas trips, one to Europe after breaking her elbow in June 2009 and one to Asia after the February 2010 earthquake in Haiti.

Her condition worsened when she fainted, fell and suffered a concussion while at home alone in mid-December as she recovered from the virus. It was announced Dec. 13.

This isn't the first time Clinton has suffered a blood clot. In 1998, midway through her husband's second term as president, Clinton was in New York fundraising for the midterm elections when a swollen right foot led her doctor to diagnose a clot in her knee requiring immediate treatment.

Clinton had planned to step down as secretary of state at the beginning of President Barack Obama's second term. Whether she will return to work before she resigns remained a question.

Democrats are privately if not publicly speculating: How might her illness affect a decision about running for president in 2016?

After decades in politics, Clinton says she plans to spend the next year resting. She has long insisted she had no intention of mounting a second campaign for the White House four years from now. But the door is not entirely closed, and she would almost certainly emerge as the Democrat to beat if she decided to give in to calls by Democratic fans and run again.

Her age and thereby health would probably be a factor under consideration, given that Clinton would be 69 when sworn in, if she were elected in 2016. That might become even more of an issue in the early jockeying for 2016 if what started as a bad stomach bug becomes a prolonged, public bout with more serious infirmity.

Not that Democrats are willing to talk openly about the political implications of a long illness, choosing to keep any discussions about her condition behind closed doors. Publicly, Democrats reject the notion that a blood clot could hinder her political prospects.

"Some of those concerns could be borderline sexist," said Basil Smikle, a Democratic strategist who worked for Clinton when she was a senator. "Dick Cheney had significant heart problems when he was vice president, and people joked about it. He took the time he needed to get better, and it wasn't a problem."

It isn't uncommon for presidential candidates' health and age to be an issue. Both in 2000 and 2008, Sen. John McCain, R-Ariz., had to rebut concerns he was too old to be commander in chief or that his skin cancer could resurface.

Two decades after Clinton became the first lady, signs of her popularity and her political strength are ubiquitous.

Obama had barely declared victory in November when Democrats started zealously plugging Clinton as their strongest White House contender four years from now, should she choose to take that leap.

"Wouldn't that be exciting?" House Democratic leader Nancy Pelosi declared in December. "I hope she goes. Why wouldn't she?"

Even Republicans concede that were she to run, Clinton would be a force to be reckoned with.

"Trying to win that will be truly the Super Bowl," Newt Gingrich, the former House Speaker and 2012 GOP presidential candidate, said in December. "The Republican Party today is incapable of competing at that level."

Americans admire Clinton more than any other woman in the world, according to a Gallup poll released Monday the 17th time in 20 years that Clinton has claimed that title. And a recent ABC News/Washington Post poll found that 57 percent of Americans would support Clinton as a candidate for president in 2016, with just 37 percent opposed. Websites have already cropped up hawking "Clinton 2016" mugs and tote bags.

Beyond talk of future politics, Clinton's three-week absence from the State Department has raised eyebrows among some conservative commentators who questioned the seriousness of her ailment after she canceled planned Dec. 20 testimony before Congress on the deadly attack on the U.S. diplomatic mission in Benghazi, Libya.

Clinton had been due to discuss with lawmakers a scathing report she had commissioned on the attack. It found serious failures of leadership and management in two State Department bureaus were to blame for insufficient security at the facility. Clinton took responsibility for the incident before the report was released, but she was not blamed. Four officials cited in the report have either resigned or been reassigned.

___

Associated Press writer Ken Thomas in Washington and AP Chief Medical Writer Marilynn Marchione in Milwaukee contributed to this report.

Read More

SEOUL (Reuters) - North Korean leader Kim Jong-un called for an end to confrontation between the two Koreas, technically still at war in the absence of a peace treaty to end their 1950-53 conflict, in a surprise New Year speech broadcast on state media.

The address by Kim, who took over power in the reclusive state after his father, Kim Jong-il, died in 2011, appeared to take the place of the policy-setting New Year editorial published in leading state newspapers.

But North Korea has offered olive branches before and Kim's speech does not necessarily signify a change in tack from a country which vilifies the United States and U.S. ally South Korea at every chance it gets.

Impoverished North Korea raised tensions in the region by launching a long-range rocket in December that it said was aimed at putting a scientific satellite in orbit, drawing international condemnation.

North Korea, which considers North and South as one country, the Democratic People's Republic of Korea, is banned from testing missile or nuclear technology under U.N. sanctions imposed after its 2006 and 2009 nuclear weapons tests.

"An important issue in putting an end to the division of the country and achieving its reunification is to remove confrontation between the north and the south," Kim said in the address that appeared to be pre-recorded and was made at an undisclosed location.

"The past records of inter-Korean relations show that confrontation between fellow countrymen leads to nothing but war."

The New Year address was the first in 19 years by a North Korean leader after the death of Kim Il-sung, Kim Jong-un's grandfather. Kim Jong-il rarely spoke in public and disclosed his national policy agenda in editorials in state newspapers.

"(Kim's statement) apparently contains a message that he has an intention to dispel the current face-off (between the two Koreas), which could eventually be linked with the North's call for aid (from the South)," said Kim Tae-woo, a North Korea expert at the state-funded Korea Institute for National Unification.

"But such a move does not necessarily mean any substantive change in the North Korean regime's policy towards the South."

The two Koreas have seen tensions rise to the highest level in decades after the North bombed a Southern island in 2010 killing two civilians and two soldiers.

The sinking of a South Korean navy ship earlier that year was blamed on the North but Pyongyang has denied it and accused Seoul of waging a smear campaign against its leadership.

Last month, South Korea elected as president Park Geun-hye, a conservative daughter of assassinated military ruler Park Chung-hee whom Kim Il-sung had tried to kill at the height of their Cold War confrontation.

Park has vowed to pursue engagement with the North and called for dialogue to build confidence but has demanded that Pyongyang abandon its nuclear weapons ambitions, something it is unlikely to do.

Conspicuously absent from Kim's speech was any mention of the nuclear arms program.

(Additional reporting by Sung-Won Shim; Editing by Nick Macfie)

Read More

BALTIMORE (AP) Same-sex couples in Maryland were greeted with cheers and noisemakers held over from New Year's Eve parties, as gay marriage became legal in the first state south of the Mason-Dixon Line on New Year's Day.

James Scales, 68, was married to William Tasker, 60, on Tuesday shortly after midnight by Baltimore Mayor Stephanie Rawlings-Blake inside City Hall.

"It's just so hard to believe it's happening," Scales said shortly before marrying his partner of 35 years.

Six other same-sex couples also were being married at City Hall. Ceremonies were taking place in other parts of the state as well.

The ceremonies follow a legislative fight that pitted Gov. Martin O'Malley against leaders of his Catholic faith. Voters in the state, founded by Catholics in the 17th century, sealed the change by approving a November ballot question.

"There is no human institution more sacred than that of the one that you are about to form," Rawlings-Blake said during the brief ceremony. "True marriage, true marriage, is the dearest of all earthly relationships."

Brigitte Ronnett, who also was married, said she hopes one day to see full federal recognition of same-sex marriage. Maryland, Maine and Washington state were the first states to approve same-sex marriage by popular vote, in November, a development Ronnett said was significant.

"I think it's a great sign when you see that popular opinion is now in favor of this," said Ronnett, 51, who married Lisa Walther, 51, at City Hall.

Same-sex couples in Maryland have been able to get marriage licenses since Dec. 6, but they did not take effect until Tuesday.

In 2011, same-sex marriage legislation passed in the state Senate but stalled in the House of Delegates. O'Malley hadn't made the issue a key part of his 2011 legislative agenda, but indicated that summer that he was considering backing a measure similar to New York's law, which includes exemptions for religious organizations.

Shortly after, Archbishop Edwin O'Brien of Baltimore wrote to O'Malley that same-sex marriage went against the governor's faith.

"As advocates for the truths we are compelled to uphold, we speak with equal intensity and urgency in opposition to your promoting a goal that so deeply conflicts with your faith, not to mention the best interests of our society," wrote O'Brien, who served as archbishop of the nation's first diocese from October 2007 to August 2011.

The governor was not persuaded. He held a news conference in July 2011 to announce that he would make same-sex marriage a priority in the 2012 legislative session. He wrote back to the archbishop that "when shortcomings in our laws bring about a result that is unjust, I have a public obligation to try to change that injustice."

The measure, with exemptions for religious organizations that choose not to marry gay couples, passed the House of Delegates in February in a close vote. O'Malley signed it in March. Opponents then gathered enough signatures to put the bill to a statewide vote, and it passed with 52 percent in favor.

In total, nine states and the District of Columbia have approved same-sex marriage. The other states are Connecticut, Iowa, Massachusetts, New Hampshire, New York and Vermont.

Read More

(Reuters/Kevin Lamarque)

Secretary of State Hillary Rodham Clinton is "making excellent progress" recovering from a blood clot in her head that was discovered during a medical examination, her doctors said Monday. But Clinton remains hospitalized until a proper medication level is established, they said.

A day after announcing that Clinton had been admitted to a New York hospital for treatment of a blood clot related to a concussion she sustained, State Department spokesman Philippe Reines on Monday released a statement from Drs. Lisa Bardack and Gigi El-Bayoumi offering further detail on Clinton's condition and how it was first diagnosed.

"In the course of a routine follow-up MRI on Sunday, the scan revealed that a right transverse sinus venous thrombosis had formed. This is a clot in the vein that is situated in the space between the brain and the skull behind the right ear. It did not result in a stroke, or neurological damage," the statement said.

To help dissolve this clot, her medical team began treating the Secretary with blood thinners. She will be released once the medication dose has been established," the statement continued. "In all other aspects of her recovery, the Secretary is making excellent progress and we are confident she will make a full recovery. She is in good spirits, engaging with her doctors, her family, and her staff."

In mid-December, the State Department announced Clinton had suffered a concussion after fainting at home. She has not been seen publicly for several weeks, but was scheduled to return to work shortly.

Clinton is expected to step down from her post later in January. President Barack Obama has name Massachusetts Sen. John Kerry as his choice to succeed Clinton.

Read More

WASHINGTON (Reuters) - A deal worked out by U.S. Senate leaders to avoid the "fiscal cliff," was far from any "grand bargain" of deficit reduction measures.

But if approved by the U.S. House of Representatives, it could help the country steer clear of recession, although enough austerity would remain in place to likely keep the economy growing at a lackluster pace.

The Senate approved a last-minute deal early Tuesday morning to scale back $600 billion in scheduled tax hikes and government spending cuts that economists widely agree would tip the economy into recession.

The deal would hike taxes permanently for household incomes over $450,000 a year, but keep existing lower rates in force for everyone else.

It would make permanent the alternative minimum tax "patch" that was set to expire, protecting middle-income Americans from being taxed as if they were rich.

Scheduled cuts in defense and non-defense spending were simply postponed for two months.

Economists said that if the emerging package were to become law, it would represent at least a temporary reprieve for the economy. "This keeps us out of recession for now," said Menzie Chinn, an economist at the University of Wisconsin-Madison.

The contours of the deal suggest that roughly one-third of the scheduled fiscal tightening could still take place, said Brett Ryan, an economist at Deutsche Bank in New York.

That is in line with what many financial firms on Wall Street and around the world have been expecting, suggesting forecasts for economic growth of around 1.9 percent for 2013 would likely hold.

At midnight Monday, low tax rates enacted under then-President George W. Bush in 2001 and 2003 expired. If the House agrees with the Senate - and there remained considerable doubt on that score - the new rates would be extended retroactively.

Otherwise, together with other planned tax hikes, the average household would pay an estimated $3,500 more in taxes, according to the Tax Policy Center, a Washington think tank. Budget experts expect the economy would take a hit as families cut back on spending.

Provisions in the Senate bill would avoid scheduled cuts to jobless benefits and to payments to doctors under a federal health insurance program.

AUSTERITY'S BITE

Like the consensus of economists from Wall Street and beyond, Deutsche Bank has been forecasting enough fiscal drag to hold back growth to roughly 1.9 percent in 2013. Ryan said the details of the deal appeared to support that forecast.

That would be much better than the 0.5 percent contraction predicted by the Congressional Budget Office if the entirety of the fiscal cliff took hold, but it would fall short of what is needed to quickly heal the labor market, which is still smarting from the 2007-09 recession.

"We continue to anticipate a significant economic slowdown at the start of the year in response to fiscal drag and a contentious fiscal debate," economists at Nomura said in a research note.

In particular, analysts say financial markets are likely to remain on tenterhooks until Congress raises the nation's $16.4 trillion debt ceiling, which the U.S. Treasury confirmed had been reached on Monday.

While the Bush tax cuts would be made permanent for many Americans under the budget deal, a two-year-long payroll tax holiday enacted to give the economy an extra boost would expire. The Tax Policy Center estimates this could push the average household tax bill up by about $700 next year.

The suspension of spending cuts sets up a smaller fiscal cliff later in the year which still could be enough to send the economy into recession, said Chinn.

He warned that ongoing worries about the possibility of recession could keep businesses from investing, which would hinder economic growth.

"You retain the uncertainty," Chinn said.

(Reporting by Jason Lange; Editing by Eric Walsh)

Read More

WASHINGTON (AP) The FBI, CIA and other intelligence agencies but not the White House made major changes in talking points that led to the Obama administration's confusing explanations of the attack on U.S. diplomatic facilities in Benghazi, Libya, a Senate report concluded Monday.

The Homeland Security and Governmental Affairs Committee report said the White House was only responsible for a minor change. Some Republicans had questioned whether the presidential staff rewrote the talking points for political reasons.

The committee, headed by independent Sen. Joe Lieberman of Connecticut and Republican Sen. Susan Collins of Maine, also said the director of national intelligence has been stonewalling the panel in holding back a promised timeline of the talking point changes.

U.S. Ambassador to Libya Chris Stevens and three other Americans were killed in the Sept. 11 attack. The U.S. ambassador to the United Nations, Susan Rice, said she used the talking points to say in television interviews on Sept. 16 that it may have been a protest that got out of hand.

Rice's incorrect explanation may have cost her a chance to be nominated as the next secretary of state, as Senate Republicans publicly said they would not vote to confirm her. President Barack Obama instead nominated Sen. John Kerry, D-Mass., chairman of the Senate Foreign Relations Committee, who is expected to win easy confirmation.

The State Department this month acknowledged major weaknesses in security and errors in judgment exposed in a scathing independent report on the assault. Two top State officials appealed to Congress to fully fund requests to ensure diplomats and embassies are safe.

Testifying before two congressional committees, senior State Department officials acknowledged that serious management and leadership failures left the diplomatic mission in Benghazi woefully unprepared for the terrorist attack. The State Department review board's report led four department officials to resign.

The Senate report said that on Sept. 19, eight days after the attack, National Counterterrorism Center Director Matthew Olsen told the Homeland committee that the four Americans died "in the course of a terrorist attack."

The same day, State Department spokeswoman Victoria Nuland said the department stood by the intelligence community's assessment. The next day, Sept. 20, presidential spokesman Jay Carney said, "It is, I think, self-evident that what happened in Benghazi was a terrorist attack." Secretary of State Hillary Rodham Clinton also used the words "terrorist attack" on Sept. 21.

Olsen's acknowledgement was important, the report said, because talking points prepared by intelligence officials the previous week had undergone major changes.

A line saying "we know" that individuals associated with al-Qaida or its affiliates participated in the attacks was changed to say, "There are indications that extremists participated."

The talking points dropped the reference to al-Qaida and its affiliates altogether. In addition, a reference to "attacks" was changed to "demonstrations."

The committee said the director of national intelligence, James Clapper, and representatives from the CIA, State Department, National Counterterrorism Center and the FBI told the panel that the changes were made within the CIA and the intelligence community. The change from "we know" there was an al-Qaida connection to "indications" of connections to "extremists" was requested by the FBI.

The report said the only White House change substituted a reference of "consulate" to "mission."

Intelligence officials differed over whether the al-Qaida reference should remain classified, the report said. It added, however, that the analyst who drafted the original talking points was a veteran career analyst in the intelligence community who believed it was appropriate to include a reference to al-Qaida in the unclassified version.

The analyst came to that conclusion because of claims of responsibility by a militant group, Ansar al-Sharia.

The committee said Clapper offered to provide the committee a detailed timeline on the development of the talking points. Despite repeated requests, the committee said the information has not been provided.

"According to a senior IC (intelligence community) official, the timeline has not been delivered as promised because the administration has spent weeks debating internally whether or not it should turn over information considered 'deliberative' to the Congress," the report said.

The report added that if the administration had described the attack as a terrorist assault from the outset, "there would have been much less confusion and division in the public response to what happened there on Sept. 11, 2012."

"The unnecessary confusion ... should have ended much earlier than it did," the committee said.

Read More