Canadian discovers how US Stock Market is completely "rigged" finds market solution is attacked by CNBC, Fox Business

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Canadian discovers how US Stock Market is completely "rigged" finds market solution is attacked by CNBC, Fox Business

Too Cool For (Bike) Helmet Head? Here"s One Swedish Solution

Enlarge image i

No more helmet hair: Hövding’s “invisible” helmet is an airbag tucked away in a collar that gets fastened around a cyclist’s neck. It’s aimed at urban cyclists and priced at $ 535.

Courtesy of Hövding

No more helmet hair: Hövding’s “invisible” helmet is an airbag tucked away in a collar that gets fastened around a cyclist’s neck. It’s aimed at urban cyclists and priced at $ 535.

Courtesy of Hövding

Hey there, hipster. No bike helmet, huh? Well, we all have our excuses. There are the vanity-driven ones that — let’s be honest — explain why the majority of our brain cages sit collecting dust in the dark corners of the garage. Squashed hair, unflattering chinstraps, general discomfort, etc.

Then there are the more nuanced arguments tied to piles of conflicting data about how effective helmets actually are (including one small, if oft-cited study suggesting that drivers tend to pass helmeted riders at closer distances than their non-helmeted counterparts).

But what if there were a helmet that answered both categories of complaint? One that respected your brain and your coiffure?

Enter, Hövding, the “invisible” helmet, brainchild of Swedish design duo Anna Haupt and Terese Alstin.

“Vanity might sound a bit stupid to talk about,” Alstin says, “but if that is the cause of people not protecting their heads in traffic, it is a real issue that you need to address.”

And, thus, what started out as a thesis project is now something that could revolutionize biking safety.

So how does it work? In a nutshell, it’s not a shell for your nut. It’s an airbag — one that’s tucked away in a collar that cyclists fastened around their neck. When the collar’s internal sensors detect a specific combination of jerks and jags signifying “ACCIDENT HAPPENING,” the airbag deploys, sending out a head-hugging, air-cushion hood in a tenth of a second.

Alstin explains: “We were aiming to do a product that was as safe as conventional helmets. But (helmets) are not really as safe as people think they are. But that has not been something that you want to talk about because there was no alternative before. Using the airbag technology we were actually able to set a completely new standard for safety in the bike helmet industry.”

Sweden has one of the highest percentages of people who use bikes as their primary mode of transportation, but only about 20 percent of adult Swedes wear helmets. Furthermore, bicyclists represented nearly 9 percent of all traffic fatalities in Sweden in 2005, the most recent year for which statistics were available. The comparable figure in the U.S. is 1.8 percent for that year.

In tests by a Swedish insurance company, Hövding was shown to be at least three times better at absorbing shock than conventional helmets (at 15 mph — this is a product aimed at urban cyclists). Hövding’s weakest point may be that it can’t protect riders from “direct hits” like overhanging branches and street signs, an issue that hasn’t prevented the company from winning Europe’s CE conformity label.

That said, Hövding has yet to be approved for sale in the U.S., and some experts are skeptical it will be able to muster a similar thumbs-up from the U.S. Consumer Product Safety Commission. But with interest mounting, Alstin says she and her colleagues are doing their best to get to the U.S. as soon as possible.

Alas, the $ 535 price tag is likely to provide a new excuse for anyone who bikes as a cost-cutting measure.

And what about cyclists in, say, Florida, where a thick collar might be slightly less appealing than in chilly Scandinavia where everyone already wears scarves that appear to hold their heads in place?

“For really hot countries, we’re thinking about developing a shell that would have a cooling system inside,” Alstin says. Innovate on.

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Too Cool For (Bike) Helmet Head? Here"s One Swedish Solution

Illinois Teachers Pension Fund is 40% Funded, Drops Deeper Into Hole Despite Investment Return of 12.8%; What"s the Solution?

Illinois Teachers Pension Fund is 40% Funded, Drops Deeper Into Hole Despite Investment Return of 12.8%; What"s the Solution?
http://currenteconomictrendsandnews.com/wp-content/uploads/2013/10/21120__TRS1.png

In spite of a 12.8% annual return, with an 8% return assumption, the Illinois Teachers Retirement System (TRS) fell another $ 3.5 billion in the hole. TRS pension underfunding grew to $ 55.73 billion as of June 30, 2013.

Via email, the Illinois Policy Institute explains the growing liability.

First, TRS only has $ 0.40 in the bank for every dollar it should have today to make necessary pension payouts in the future. That means the high investment returns in 2013 were earned on less than half of the assets that TRS should have

TRS acknowledged this in a recent press release:

“Despite these strong returns, TRS cannot invest its way out of the funding hole we are in,” Ingram added. “This increase in the System’s unfunded liability, even with good investment results, is another wake-up call to state officials and our members that TRS long-term finances continue to head in the wrong direction.”

“Without changes to the pension code to ensure sustained and adequate funding, TRS faces the very real possibility that in a few decades the System will not have enough money to pay benefits to retirees. We cannot guarantee that TRS will have enough money to pay the pensions promised to every member in the System.”

Second, the inherent flaws of the state’s defined benefit pension system have driven up the shortfall significantly. According to the Commission on Government Forecasting and Accountability, the state’s pension shortfall grew by $ 41 billion from 1996 to 2012.

Of that amount, nearly $ 23 billion came from some form of missed “assumption” that continually plagues defined benefit pension plans:

• The investment returns for the state’s five pension funds were lower than their assumed 8% expectation. Cost to taxpayers: $ 9.5 billion.


• Unplanned benefit increases for employees. Cost to taxpayers: $ 1.1 billion.


• Changes in actuarial assumptions. Cost to taxpayers: $ 4.9 billion.


• “Other” actuarial factors. Cost to taxpayers: $ 7.2 billion.

TRS fails to acknowledge the failures of the defined benefits plan and instead chooses to blame taxpayers for not contributing enough to the system.

Who is to Blame for Shortfalls?

Please consider the Illinois Policy Center report State pension contributions: Taxpayers bear the brunt of increasing pension costs

A common refrain sounded by public sector unions is that government workers have consistently “paid their share” into Illinois’ pension systems and the state has not. However, the facts tell a different story.

While government worker contributions to Illinois’ five pension systems have increased by 75 percent since 1998, taxpayer contributions have increased by 427 percent over the same period. In 2012 alone, Illinois taxpayers contributed $ 3.5 billion more to the pension systems than state workers did.

Government workers’ share, as a percentage of total contributions, has continued to decline when compared to taxpayers’ contributions. In 1998, government workers paid for 47 percent of the state’s total pension contribution; today, they only pay 21 percent. By 2045, government workers will be expected to pay only 17 percent of total pension contributions.

Illinois’ Five Pension Systems

Illinois has five state pension systems, and all of them are seriously underfunded:

1. The Teachers’ Retirement System, or TRS, manages pensions for teachers across Illinois (excluding Chicago).With more than 130,000 active members and nearly 95,000 retirees, TRS is the largest pension system in the state. Unfortunately, TRS also has the highest unfunded liability of the state’s pension systems. In 2012, TRS was only 40.6 percent funded and officially had more than $ 53.51 billion in unfunded liabilities. TRS members contribute 9.4 percent of their salary to the pension system.


2. The State Employees’ Retirement System, or SERS, manages pensions for state-level employees across Illinois. It has 62,000 active members and 50,000 retirees. In 2012, SERS was only 33.1 percent funded and had officially $ 22.13 billion in unfunded liabilities. Under its regular pension formula, SERS members covered by Social Security contribute 4 percent of their salary, and those not covered by Social Security contribute 8 percent of their salary to the pension system.


3. The State Universities Retirement System, or SURS, manages pensions for employees working at state universities. It has 71,000 active members and more than 45,500 retirees. In 2012, SURS was only 41.3 percent funded and had officially $ 19.46 billion in unfunded liabilities. SURS members contribute 8 percent of their salary to the pension system.


4. The Judges’ Retirement System, or JRS, manages pensions for judges throughout the state. It is one of the two smaller pension systems, with only 968 active members and 725 retirees. Despite its small size, in 2012 JRS was only 28.6 percent funded and officially had $ 1.44 billion in unfunded liabilities. JRS members contribute 11 percent of their salary to the pension system.


5. The General Assembly Retirement System, or GARS, manages pensions for members of the Illinois General Assembly. Despite having only 176 active members and 294 retirees, GARS has the dubious honor of being the worst-funded pension system in the state. In 2012, GARS was only 17.4 percent funded and officially had $ 251 million in unfunded liabilities. GARS members contribute 11.5 percent of their salary to the pension system.

All Five Systems Bankrupt

TRS, SERS,SURS, JRS, and GARS are all insolvent. None of them can possibly meet their pension obligations. With 10-year treasuries yielding a scant 2.5%, plan assumptions of 8% are preposterously high on a sustained basis.

Yet, TRS went another $ 3.5 billion in the hole in spite of a 12.8% annual return.

What the hell is TRS going to do in the face of a stock market plunge, a bond market plunge, or both?

GARS, the General Assembly Retirement System is only 17.4% funded. Is it any wonder that state legislators are pressing for more tax hikes?

Beware Tax Hikes!

On October 18, I reported Illinoisans Beware: “Progressives” Seek Massive Tax Hike Again; Fight the Hike!

Pension shortfalls are the reason for the proposed hikes.

A few people commented the “progressive” tax was not as much as they pay. Here is Rep Naomi Jakobsson’s proposed scheme.

Property Taxes

What I failed to point out previously is that I pay $ 14,000 annually in property taxes on a home I can sell for $ 400K or so.

Sales Taxes

My sales tax rate is  7.75%. But hey, that could be worse. Cicero tops the state with a 9.5% tax. In Chicago, the sales tax is 9.25%.

In spite of all these massive taxes, the entire state is bankrupt!

The Solution

Raising taxes for the benefit of legislators and seriously undeserving public unions is certainly not the answer. The solution is twofold:

1. Immediately kill all Illinois public defined-benefit pension plans


2. Drastically lower existing pension plan expectations, via default if necessary

Nothing else can possibly work, and the numbers prove it.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com

Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Mish’s Global Economic Trend Analysis

Read more about Illinois Teachers Pension Fund is 40% Funded, Drops Deeper Into Hole Despite Investment Return of 12.8%; What"s the Solution? and other interesting subjects concerning Commentary at TheDailyNewsReport.com

Empire Building, the Debt Ceiling, the Budget Deficit and the “Samson Solution”

Introduction

            US and world political and economic leaders are faced with what they describe as a ‘systemic catastrophe’:  the inability to pay global creditors, including domestic and foreign banks, investors and governments, who hold $ 16.7 trillion in US Treasury notes.  There is a related crisis: the government cannot secure passage of a budget to finance its military and civilian agencies and activities, including large-scale payments to military contractors, the financing of business, agriculture and banking operations and social programs.  The raising of the debt-ceiling is central to the functioning of the financial ruling class as it extracts hundreds of billions of tax dollars in interest payments from the US Treasury.  Raising the debt ceiling allows the State to keep borrowing and pay its billionaire creditors.  In turn, as long as the US Treasury has liquidity, it remains a ‘safe haven’ for investors thus providing guaranteed profits.  In addition, as long as the dollar remains the principle currency for global transactions, it allows the US Treasury to print money at will and to borrow at a lower cost – at the expense of its competitors and adversaries.

             Financing the budget deficit requires borrowing, which involves the sale hundreds of billions of dollars worth of US government bonds through Wall Street – but at a cost to the taxpayer.  The common denominator is that the entire edifice of finance capital and all of its support structures depend on debt financing by the State.  By borrowing and then taxing its citizens the Treasury extracts wealth from the vast majority of Americans.

            To understand the fight to raise the debt ceiling and to pass a deficit budget it is necessary to analyze the long-term, large-scale sources of State debt.

Imperial Wars, the Ascendancy of Finance Capital and the Debt Crisis

            The ever-increasing debt and the constant raising of the debt ceiling is a result of long-term, large-scale military spending to build the US Empire.  The imperial enterprise has generated a huge deficit:  the cost/benefit ratio has been overwhelmingly negative.  Contrary to militarist propaganda, the empire has not been ‘self-financing’:  Wars and occupation in Iraq , Afghanistan and elsewhere have cost the US taxpayers trillions of dollars, not off-set by incoming imperial plunder or domestic economic expansion.

            Parallel to the cost of wars and occupations, the rise of finance capital has largely resulted from the pillage of the US Treasury.  Huge bailouts, low interest loans, large-scale interest payments on bonds, subsidies and tax exemptions have created a financial ruling class based on maintaining a debt-laden, interest-paying State, which meets its obligations to the creditors while it privatizes (and eliminates) social programs.  The result is a ‘poor indebted State’ and a rich and prosperous Wall Street.  Wall Street stands to gain trillions with the privatization of the multi-billion dollar health (Medicare) and retirement plans (Social Security): this will form an integral component of the “Grand Bargain” to raise the debt ceiling.

Who are the Beneficiaries of Raising the Debt Ceiling?

            The principle and immediate beneficiaries of increasing the debt ceiling are the wealthy, bond-holders and the medium and long-term beneficiaries are the military-intelligence-empire-builders who can continue to secure over $ 700 billion in annual budget allocations.  The principle strategic losers from raising the debt ceiling will be the hundreds of millions of beneficiaries of social programs like Social Security, Medicare and Medicaid and their family members.  As part of the ‘Grand Bargain’ struck by the Democratic President and Republican Congress – between $ 1.3 trillion and $ 1.4 trillion in social cuts will take effect over the next ten years, according to the Congressional Budget Office.  The cuts in Social Security will occur by raising the age of eligibility for full benefits to 70 years, resulting in a loss of $ 120 billion, as many older retired workers would be expected to die before drawing a single payment while millions of Americans  will be forced to delay retirement and work an extra five years.

Secondly, the earliest age of eligibility for partial benefits will increase from 62 to 64 years – resulting in an additional loss of $ 144 billion dollars from workers.

Thirdly, the cost of living index would be reduced – a ten- year loss of $ 112 billion dollars.

Fourthly, the calculation for initial benefits would discard the wage-based method for a so-called “price-index”, resulting in American workers losing another $ 137 billion dollars over 10 years.  In sum, workers’ social security benefits would be reduced by more than half a trillion dollars – an enormous transfer of wealth to the billionaire creditors, investors and empire builders – all in the name of ‘debt reduction’.

The cuts in MEDICARE and MEDICAID would result in an even more retrograde class polarization.  The ‘Grand Bargain’ could lead to additional losses of over $ 419 billion dollars.

The biggest cost to the workers will come in the form of an increase in their  monthly premium  for physician services (MEDICARE Part B) from the current 25%  to 35%, resulting in a loss of $ 241 billion dollars.  The second biggest loss to workers will result from raising the age of eligibility for MEDICARE from 65 to 67 years costing workers an additional S125 billion dollars.  The third loss for workers will be a $ 53 billion hit  from restricting the use of MEDIGAP insurance – supplementary policies that cover MEDICARE cost sharing requirements.

Further cuts of $ 187 billion in MEDICAID– the medical plan for the poor and disabled– would result when the federal government shifts its direct funding to block grants to the states that would severely cut services for the poor – a plan first proposed during the Clinton Administration with regard to welfare funding.

Once these reactionary cuts in basic social programs are in place, the beneficiaries, who are able, will be forced to buy alternative supplementary private medical insurance and private retirement plans, while the poor will go without.  The running down of public social services by Wall Street has been a deliberate, cynical strategy to cause popular discontent paving the way for the gradual privatization of services: adding costs, eliminating options and limiting medical treatment, surgery and procedures, especially for the elderly.  The privatization of Social Security, MEDICARE and MEDICAID, will maximize insecurity while minimizing services and lead to untreated and under-treated illness, greater suffering and economic distress.  Bi-partisan Congressional –White House agreements via the “Great Bargain” to raise the debt ceiling will widen and deepen inequalities in the United States .

In sum, “the Grand Bargain” will cause American workers to lose over $ 1.119 trillion dollars over the next 10 years, leading to a sharp decline in life expectancy, access to health care, living standards and quality of life.

The Samson Solution

            Given the harsh terms, which accompany the “Grand Bargain” to raise the debt ceiling, it would be better if no agreement were reached.  The financial elite is counting on the ‘Grand Bargain’ to leverage their debt collection over the lives and welfare of hundreds of millions of Americans.  It would be better to shake the pillars and pull down this Temple of Mammon (the ‘Samson Solution’) making them pay a price!

            The ‘shock and awe’ induced by default would shake the very foundations of the financial pillage of the US Treasury and the taxpayers; default would seriously undermine the financial basis for imperial wars, spying, torture and death squads.  The entire empire building project would crumble.

            True, in the short-run, the workers and middle class would also suffer from a default.  But the discredit of the ruling political parties, the political elite and Wall Street, could lead to a new political alignment, which would fund social programs by, in David Stockman’s phrase, “soaking the rich” – raising corporate taxes by 50%, imposing a financial transaction tax of 5%, uncapping the social security tax and collecting taxes on overseas US multi-nationals’ profits.  Additional billions would be saved by ending imperial wars, closing bases and canceling military contracts.  Tax reform, imperial dismantlement and increased domestic investment in productive activity would generate domestic growth leading to a budget surplus, extending MEDICARE to all Americans, reducing the age of retirement to 62 and providing a living wage for all workers!

Global Research

Empire Building, the Debt Ceiling, the Budget Deficit and the “Samson Solution”

Default looming, Day 14 of shutdown, no solution

Senate Majority Leader Sen. Harry Reid, D-Nev., walks to his office after arriving on Capitol Hill on Monday, Oct. 14, 2013 in Washington. The federal government remains partially shut down and faces a first-ever default between Oct. 17 and the end of the month. (AP Photo/ Evan Vucci)

Senate Majority Leader Sen. Harry Reid, D-Nev., walks to his office after arriving on Capitol Hill on Monday, Oct. 14, 2013 in Washington. The federal government remains partially shut down and faces a first-ever default between Oct. 17 and the end of the month. (AP Photo/ Evan Vucci)

Senate Minority Leader Sen. Mitch McConnell, R-Ken., walks to his office after arriving on Capitol Hill on Monday, Oct. 14, 2013 in Washington. The federal government remains partially shut down and faces a first-ever default between Oct. 17 and the end of the month. (AP Photo/ Evan Vucci)

Sen. Mike Lee, R-Utah, waves at a rally at the World War II Memorial on the National Mall in Washington Sunday, Oct. 13, 2013. Leaders in the U.S. Senate have taken the helm in the search for a deal to end the partial government shutdown and avert a federal default. The rally was organized to protest the closure of the Memorial, subsequent to the shutdown, and lack of access to it by World War II veterans, who traveled there on Honor Flight visits. To Lee’s right is tea party activists and former Alaska governor Sarah Palin. (AP Photo/Alex Brandon)

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WASHINGTON (AP) — With rising anxiety in the markets at home and abroad, Congress and the White House moved perilously closer to a default Monday with much of the government closed and Senate Democratic and Republican leaders still at odds in negotiations to end the crises.

Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., spoke by phone Sunday but failed to agree on a deal to raise the nation’s borrowing authority above the $ 16.7 trillion debt limit or reopen the government. Congress is racing the clock with Treasury Secretary Jack Lew warning that the U.S. will quickly exhaust its ability to pay the bills on Thursday.

Separately, a bipartisan group led by Sen. Susan Collins, R-Maine, met for two hours Monday morning on a possible solution to the impasse.

“We’re making very good progress, but there’s still many details to be worked out,” Collins said before joining her GOP colleagues at a meeting with McConnell. “We don’t have a finished, agreed-upon product yet but I think we had an excellent meeting. And we’ll get together later today.”

There was no certainty that the growing anxiety among financial leaders around the world would provide the necessary jolt to Senate leaders, who represent the last, best chance for a resolution after talks between President Barack Obama and House Republican leaders collapsed.

Sen. Joe Manchin, D-W.Va., said Monday that investors are growing increasingly “skittish” about the possibility of default. The bond markets were closed for Columbus Day, and by mid-morning the stock market was down modestly, with both the Dow Jones industrial average and Standard & Poor’s 500 index losing less than 1 percent. Trading in Asia was muted, with markets in Tokyo and Hong Kong closed for holidays.

The shutdown has furloughed 350,000 federal workers, impeded various government services, put continued operations of the federal courts in doubt and stopped the IRS from processing tax refunds. Some parks and monuments remain closed, drawing a protest at the National World War II Memorial on Sunday that included tea party-backed lawmakers who had unsuccessfully demanded defunding of Obama’s 3-year-old health care law in exchange for keeping the government open.

Economists see greater financial danger from an historical default. Christine Lagarde, the International Monetary Fund’s managing director, spoke fearfully about the disruption and uncertainty, warning on Sunday of a “risk of tipping, yet again, into recession” after the fitful recovery from 2008.

Reid and McConnell — five-term senators hardened by budget disputes and years of negotiations — are at an impasse over the automatic, across-the-board spending cuts known as sequestration and whether to undo or change them as part of a budget deal. Republicans want to keep the spending at the deficit-cutting level of the 2011 budget law while Democrats are pressing for a higher amount.

“I’m optimistic about the prospects for a positive conclusion to the issues before this country today,” Reid said as the Senate wrapped up a rare Sunday session.

McConnell insisted a solution was readily available as he embraced the proposal from a bipartisan group of 12 senators, led by Collins and Manchin, that would re-open the government and fund it at current levels for six months while raising the debt limit through Jan. 31.

It also would give agencies greater flexibility in dealing with the automatic budget cuts, delay the medical device tax for two years and establish income verification for individuals receiving subsidies to buy health insurance.

“It’s time for Democrat leaders to take ‘yes’ for an answer,” McConnell said in a statement.

“This haven’t put us on suicide watch yet,” Manchin joked Monday morning, “but they’re concerned about us.”

He said, “The leaders have to come together” and decide what time frame a stopgap spending bill would cover and how much it would cost.

Tennessee’s Sen. Bob Corker, a Republican, said the leaders of both parties need to be “getting on the same page.”

Politically, Republicans are reeling, bearing a substantial amount of the blame for the government shutdown and stalemate.

“We’re in a free-fall as Republicans, but Democrats are not far behind,” said Sen. Lindsey Graham, R-S.C., in warning Democrats about seizing on the GOP’s bruised brand as leverage to win more concessions.

McConnell and Republicans want to continue current spending at $ 986.7 billion and leave untouched the new round of cuts on Jan. 15 that would reduce the amount to $ 967 billion. Democrats want to figure out a way to undo the reductions, plus a long-term extension of the debt limit increase and a short-term spending bill to reopen the government.

“Republicans want to do it with entitlement cuts,” said Sen. Chuck Schumer, D-N.Y. “Democrats want to do it with a mix of mandatory cuts, some entitlements and revenues. And so how do you overcome that dilemma? We’re not going to overcome it in the next day or two.”

He suggested keeping the government running through mid-January.

Sen. Dick Durbin of Illinois, the No. 2 Democrat in the Senate, told reporters the two sides are roughly $ 70 billion apart, the difference between the $ 1.058 trillion Senate budget amount and the $ 988 billion envisioned by House Budget Committee Chairman Paul Ryan, R-Wis.

“We haven’t picked a number, but clearly we need to negotiate between those two,” Durbin said.

Republicans dismiss the latest request as Reid moving the goalposts in negotiations as they were getting closer to resolving the stalemate that has paralyzed Washington. They also argue that it is disingenuous for Democrats to resist any changes in the 3-year-old health care law while trying to undo the 2011 budget law that put the cuts on track.

Graham and Sen. Rand Paul, R-Ky., said they would not support any deal that upends the spending limits imposed by the 2011 law, and predicted that their Senate GOP colleagues would oppose it as well.

Unclear was whether any Senate deal would pass the Republican-controlled House by Thursday, though Senate Democrats were hoping momentum and an imminent default would pressure House lawmakers.

Graham appeared on ABC’s “This Week,” Corker was interviewed on “Fox News Sunday,” Schumer spoke on CBS’ “Face the Nation” and Lagarde was on NBC’s “Meet the Press.”

Corker was interviewed on NBC’s “Today” show Monday and Manchin appeared on Fox News Channel and MSNBC.

Associated Press

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Politics Headlines

Default looming, Day 14 of shutdown, no solution

Default looming, Day 14 of shutdown, no solution

Sen. Mike Lee, R-Utah, waves at a rally at the World War II Memorial on the National Mall in Washington Sunday, Oct. 13, 2013. Leaders in the U.S. Senate have taken the helm in the search for a deal to end the partial government shutdown and avert a federal default. The rally was organized to protest the closure of the Memorial, subsequent to the shutdown, and lack of access to it by World War II veterans, who traveled there on Honor Flight visits. To Lee’s right is tea party activists and former Alaska governor Sarah Palin. (AP Photo/Alex Brandon)

Sen. Mike Lee, R-Utah, waves at a rally at the World War II Memorial on the National Mall in Washington Sunday, Oct. 13, 2013. Leaders in the U.S. Senate have taken the helm in the search for a deal to end the partial government shutdown and avert a federal default. The rally was organized to protest the closure of the Memorial, subsequent to the shutdown, and lack of access to it by World War II veterans, who traveled there on Honor Flight visits. To Lee’s right is tea party activists and former Alaska governor Sarah Palin. (AP Photo/Alex Brandon)

Senate Majority Leader Harry Reid of Nevada takes the elevator after a rare Senate session on Capitol Hill in Washington, Sunday, Oct. 13, 2013. Senate Republicans and Democrats hit an impasse Sunday over spending in their last-ditch struggle to avoid an economy-jarring default in just four days and end a partial government shutdown that’s entering its third week. ( AP Photo/Jose Luis Magana)

People walk around the World War II Memorial and the Lincoln Memorial, seen in the background, Sunday, Oct. 13, 2013 in Washington. The WWII memorial has been closed due to the government shutdown. Access barriers to the memorial site were moved aside by protesters. (AP Photo/Alex Brandon)

Sen. Bob Corker, R-Tenn., speaks with reporters on Capitol Hill in Washington, Sunday, Oct. 13, 2013. Senate Republicans and Democrats hit an impasse Sunday over spending in their last-ditch struggle to avoid an economy-jarring default in just four days and end a partial government shutdown that enters its third week. ( AP Photo/Jose Luis Magana)

Tea Party Sen. Ted Cruz, R-Texas, speaks at a rally at the World War II Memorial on the National Mall in Washington Sunday, Oct. 13, 2013, as leaders in the U.S. Senate have taken the helm in the search for a deal to end the partial government shutdown and avert a federal default. (AP Photo/Alex Brandon)

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WASHINGTON (AP) — The United States moved perilously closer to an economy-rattling default and a partial government shutdown entered its 14th day as Senate Democratic and Republican leaders remained at odds over spending in their last-ditch negotiations to end the crises facing the nation.

Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., spoke by phone Sunday but failed to agree on a deal to raise the nation’s borrowing authority above the $ 16.7 trillion debt limit or reopen the government. Congress is racing the clock with Treasury Secretary Jack Lew warning that the U.S. will quickly exhaust its ability to pay the bills on Thursday.

But there was no certainty that the growing anxiety among financial leaders around the world would provide the necessary jolt to Senate leaders, who represent the last, best chance for a resolution after talks between President Barack Obama and House Republican leaders collapsed.

Sen. Joe Manchin, D-W.Va., said Monday that investors are growing increasingly “skittish” about the possibility of default. The bond markets were closed for Columbus Day, and by mid-morning the stock market was down modestly, with both the Dow Jones industrial average and Standard & Poor’s 500 index losing less than 1 percent. Trading in Asia was muted, with markets in Tokyo and Hong Kong closed for holidays.

The shutdown has furloughed 350,000 federal workers, impeded various government services, put continued operations of the federal courts in doubt and stopped the IRS from processing tax refunds. Some parks and monuments remain closed, drawing a protest at the National World War II Memorial on Sunday that included tea party-backed lawmakers who had unsuccessfully demanded defunding of Obama’s 3-year-old health care law in exchange for keeping the government open.

Economists see greater financial danger from an historical default. Christine Lagarde, the International Monetary Fund’s managing director, spoke fearfully about the disruption and uncertainty, warning on Sunday of a “risk of tipping, yet again, into recession” after the fitful recovery from 2008.

Reid and McConnell — five-term senators hardened by budget disputes and years of negotiations — are at an impasse over the automatic, across-the-board spending cuts known as sequestration and whether to undo or change them as part of a budget deal. Republicans want to keep the spending at the deficit-cutting level of the 2011 budget law while Democrats are pressing for a higher amount.

“I’m optimistic about the prospects for a positive conclusion to the issues before this country today,” Reid said as the Senate wrapped up a rare Sunday session.

McConnell insisted a solution was readily available as he embraced the proposal from a bipartisan group of 12 senators, led by Sens. Susan Collins, R-Maine, and Manchin, that would re-open the government and fund it at current levels for six months while raising the debt limit through Jan. 31.

It also would give agencies greater flexibility in dealing with the automatic budget cuts, delay the medical device tax for two years and establish income verification for individuals receiving subsidies to buy health insurance.

“It’s time for Democrat leaders to take ‘yes’ for an answer,” McConnell said in a statement.

“This haven’t put us on suicide watch yet,” Manchin joked Monday morning, “but they’re concerned about us.”

He said, “The leaders have to come together” and decide what time frame a stopgap spending bill would cover and how much it would cost.

Tennessee’s Sen. Bob Corker, a Republican, said the leaders of both parties need to be “getting on the same page.”

Politically, Republicans are reeling, bearing a substantial amount of the blame for the government shutdown and stalemate.

“We’re in a free-fall as Republicans, but Democrats are not far behind,” said Sen. Lindsey Graham, R-S.C., in warning Democrats about seizing on the GOP’s bruised brand as leverage to win more concessions.

McConnell and Republicans want to continue current spending at $ 986.7 billion and leave untouched the new round of cuts on Jan. 15 that would reduce the amount to $ 967 billion. Democrats want to figure out a way to undo the reductions, plus a long-term extension of the debt limit increase and a short-term spending bill to reopen the government.

“Republicans want to do it with entitlement cuts,” said Sen. Chuck Schumer, D-N.Y. “Democrats want to do it with a mix of mandatory cuts, some entitlements and revenues. And so how do you overcome that dilemma? We’re not going to overcome it in the next day or two.”

He suggested keeping the government running through mid-January.

Sen. Dick Durbin of Illinois, the No. 2 Democrat in the Senate, told reporters the two sides are roughly $ 70 billion apart, the difference between the $ 1.058 trillion Senate budget amount and the $ 988 billion envisioned by House Budget Committee Chairman Paul Ryan, R-Wis.

“We haven’t picked a number, but clearly we need to negotiate between those two,” Durbin said.

Republicans dismiss the latest request as Reid moving the goalposts in negotiations as they were getting closer to resolving the stalemate that has paralyzed Washington. They also argue that it is disingenuous for Democrats to resist any changes in the 3-year-old health care law while trying to undo the 2011 budget law that put the cuts on track.

Graham and Sen. Rand Paul, R-Ky., said they would not support any deal that upends the spending limits imposed by the 2011 law, and predicted that their Senate GOP colleagues would oppose it as well.

Unclear was whether any Senate deal would pass the Republican-controlled House by Thursday, though Senate Democrats were hoping momentum and an imminent default would pressure House lawmakers.

Graham appeared on ABC’s “This Week,” Corker was interviewed on “Fox News Sunday,” Schumer spoke on CBS’ “Face the Nation” and Lagarde was on NBC’s “Meet the Press.”

Corker was interviewed on NBC’s “Today” show Monday and Manchin appeared on Fox News Channel and MSNBC.

Associated Press

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Politics Headlines

Default looming, Day 14 of shutdown, no solution

U.S. warns diplomatic solution for Syria will take time

A Free Syrian Army fighter peeks through a hole in a wall in Aleppo’s Qastal al-Harami neighbourhood September 11, 2013.

Credit: Reuters/Nour Kelze

By Susan Heavey and Steve Holland

WASHINGTON | Wed Sep 11, 2013 8:21pm EDT

WASHINGTON (Reuters) – The White House warned on Wednesday that a diplomatic solution over Syria would take “some time” and pledged to pursue talks despite skepticism from U.S. lawmakers that Damascus would make good on a Russian plan to surrender its chemical weapons.

A day after President Barack Obama urged Americans to support his call for military strikes if diplomacy failed, officials warned of a long process ahead.

The diplomatic initiative, kicked off by Syria’s close ally Russia as a way to avert U.S. military strikes, was scheduled to move forward on Thursday when U.S. Secretary of State John Kerry meets in Geneva with Russian Foreign Minister Sergei Lavrov.

The State Department said those talks would last two days or more. At the heart of the talks will be Russia’s opposition to a continued threat of military action that Washington says is needed to ensure Syria complies.

“We are doing the responsible thing here, which is testing the potential there for success,” White House spokesman Jay Carney told a briefing, referring to a diplomatic push.

“I suspect this will take some time.”

A senior State Department official said Kerry and Lavrov had spoken about their desire while in Geneva to have “a substantive discussion about the mechanics of identifying, verifying and ultimately destroying Assad’s chemical weapons stockpile so they can never be used again,” referring to Syrian President Bashar al-Assad.

Russia’s proposal for Syria to surrender its chemical weapons to international control, which has been agreed by Damascus, was seen by Obama as a possible way to avoid a military strike opposed by most Americans.

There has also been stiff opposition in Congress to military intervention. Obama conceded on Monday that he was not confident he had the votes for congressional authorization.

Obama wants to hold Assad accountable for a suspected chemical weapons attack in a Damascus neighborhood on August 21 that U.S. officials say killed about 1,400 people including 400 children. Syria denies it instigated such an attack.

U.S. lawmakers expressed skepticism about Russia’s plan.

Bob Corker, the top Republican on the Senate Foreign Relations Committee, said on CNBC he was “1,000 percent supportive of us figuring out the right solution here diplomatically” but that he had “zero trust” in Russia.

Senator John McCain, a Republican who has been one of the most vocal proponents of a military strike, told a Wall Street Journal breakfast roundtable with reporters that he was not optimistic that diplomacy would succeed.

“Put me down as extremely skeptical,” said McCain, who is among a bipartisan group of nine senators seeking to draft a resolution that would be presented to Congress for a vote if a diplomatic agreement is reached.

Under that proposal, U.S. action would depend on a U.N. resolution demanding Assad put his chemical weapons under U.N. international control by a certain date. If he failed to do so, Obama would be authorized to use force.

DEFENSE CHIEF CALLS WARSHIP

Obama said on Tuesday he ordered the military to maintain its current posture in case diplomacy fails.

To that end, Defense Secretary Chuck Hagel on Wednesday called the commanding officer of the USS Barry, a guided missile destroyer that is one of the ships standing at a heightened state of readiness in the eastern Mediterranean Sea.

Hagel commended the Barry and other ships in its group for “ensuring that the United States military can carry out the orders of the commander-in-chief, if called upon,” the Pentagon said.

Some members of Congress said it was vital to maintain the threat of force. Damascus had previously denied it had used such weapons and refused to admit it even had a chemical weapons program.

“Assad and the Russian backers would not have raised that possibility (of scrapping the weapons) if they did not face the threat of military force, and they are unlikely to follow through if the threat does not remain credible,” Carl Levin, chairman of the Senate Armed Services Committee, told a meeting of defense reporters.

He backed a provision in the French draft of a U.N. Security Council resolution that would open the way for military action if Syria fails to act on the weapons.

“America must be vigilant and be willing to use force if necessary and Congress should not take the threat of military force off the table,” said Senate Majority Leader Harry Reid, a Democrat.

“If there’s any indication these (talks) are not serious, if it’s a ploy to delay, to obstruct, to divert, then I think we have to again give the president the authority to hold the Assad regime accountable,” he said.

U.S. lawmakers said the Senate could start voting next week on a resolution to authorize the use of military force if diplomatic efforts fell short.

The Obama administration kept up its drive to win support for its approach.

Vice President Joe Biden held two classified briefings at the White House for groups of Republicans from the House of Representatives, and deputy national security adviser Tony Blinken held a classified briefing for all House Democrats, an administration official said.

McCain questioned the decision to have Kerry meet with Lavrov, saying the United States needs to press ahead with more forceful action. “I feel badly, very badly for my friends in the Free Syrian Army today,” he told MSNBC’s “Morning Joe” program.

“There is nothing more that will drive Syrians into the hands of the extremists than to feel that they have been abandoned by the West.”

The rebel Syrian National Coalition has decried the diplomatic proposal as a “cheap trick” that would allow Assad more time to kill Syrians.

Kerry also intends to meet with U.N.-Arab League envoy Lakhdar Brahimi while in Geneva, State Department spokeswoman Jen Psaki said.

(Additional reporting by Richard Cowan, Thomas Ferraro, Paul Eckert, Tabassum Zakaria, Jeff Mason and Phil Stewart; Editing by Karey Van Hall, David Storey, Jim Loney and Mohammad Zargham)

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Reuters: Politics

U.S. warns diplomatic solution for Syria will take time

Kerry: Political solution urgently needed in Syria

U.S. Ambassador to Qatar Susan Ziadeh, left, walks with U.S. Secretary of State John Kerry, second from left, and Ambassador Ibrahim Fakhroo, Qatari Chief of Protocol, on Kerry’s arrival in Doha, Qatar, on Saturday, June 22, 2013. Kerry began the overseas trip plunging into two thorny foreign policy problems facing the Obama administration: unrelenting bloodshed in Syria and efforts to talk to the Taliban and find a political resolution to the war in Afghanistan. (AP Photo/Jacquelyn Martin, Pool)

U.S. Ambassador to Qatar Susan Ziadeh, left, walks with U.S. Secretary of State John Kerry, second from left, and Ambassador Ibrahim Fakhroo, Qatari Chief of Protocol, on Kerry’s arrival in Doha, Qatar, on Saturday, June 22, 2013. Kerry began the overseas trip plunging into two thorny foreign policy problems facing the Obama administration: unrelenting bloodshed in Syria and efforts to talk to the Taliban and find a political resolution to the war in Afghanistan. (AP Photo/Jacquelyn Martin, Pool)

U.S. Secretary of State John Kerry, center, walks through the airport with Ambassador Ibrahim Fakhroo, Qatari Chief of Protocol, left, after being greeted on arrival in Doha, Qatar, on Saturday, June 22, 2013. Kerry began an overseas trip plunging into two thorny foreign policy problems facing the Obama administration: unrelenting bloodshed in Syria and efforts to talk to the Taliban and find a political resolution to the war in Afghanistan. (AP Photo/Jacquelyn Martin, Pool)

DOHA, Qatar (AP) — U.S. Secretary of State John Kerry called on Saturday for an urgent political resolution to the war in Syria, saying that unless the bloodshed stops, the region could descend into a chaotic sectarian conflict.

Kerry met in Doha with 10 of his counterparts from Arab and European nations to coordinate aid to the embattled rebels trying to oust Syrian President Bashar Assad in a two-year civil war that has left 93,000 dead. All the nations in attendance agreed to step up aid to the rebels, Kerry said.

While he offered no specifics, Kerry said the assistance would help change the balance on the battlefield, where regime forces have scored recent victories. Kerry blamed Assad for the deteriorating situation in Syria, saying that while the international community was attempting to hold a conference to set up a transitional government, Assad invited Iranian and Hezbollah fighters to bolster his troops.

It was Kerry’s first meeting with his counterparts about aid to the Syrian rebels since President Barack Obama announced that the U.S. would send lethal aid to the opposition despite concern that weapons could fall into the hands of Islamic extremists in Syria. That decision was partly based on a U.S. intelligence assessment that Assad had used chemical weapons, but Kerry expressed deeper concern about Iran and Hezbollah fighters.

“That is a very, very dangerous development,” Kerry said. “Hezbollah is a proxy for Iran. … Hezbollah in addition to that is a terrorist organization.”

Kerry blamed Hezbollah and Assad with thwarting efforts to diffuse sectarian rebels and to negotiate a settlement.

“We’re looking at a very dangerous situation,” that had transformed “into a much more volatile, potentially explosive situation that could involve the entire region,” Kerry said.

The war already has spilled into neighboring countries and is increasingly being fought along sectarian lines, pitting Sunni against Shiite Muslims and threatening the stability of Syria’s neighbors.

Kerry met with his counterparts in the Qatari capital on the first stop of a seven-nation trip through the Mideast and Asia where he is tackling difficult foreign policy issues — from finding peace between the Israelis and Palestinians to trying to gain traction on U.S. talks with the Taliban to end the Afghanistan war. James Dobbins, U.S. special envoy to Afghanistan and Pakistan, arrived in Doha on Saturday, but talks with the Taliban have not been scheduled.

Kerry seemed to put the ball in the Taliban’s court, saying the Americans and Qataris were all on board to help negotiate a political resolution to the war and it was up to the Taliban to come to the table at a new political office they opened last week in Doha. “We are waiting to find out whether the Taliban will respond, Kerry said.

“We will see if we can get back on track. I don’t know whether that’s possible or not,” Kerry said. “If there is not a decision made by the Taliban to move forward in short order, then we may have to consider whether the office has to be closed.”

On Syria, Kerry has been pressing hard on Russia to back an international conference intended to end the bloodshed in Syria and allow a transitional government to move the country beyond civil war.

Russia has been the key ally of Assad’s regime throughout the two-year conflict.

Top U.S. diplomats are ready to go to Geneva to meet with Russian Foreign Minister Sergey Lavrov and other officials next week to advance the political process, Kerry said. The date and location of the international conference on Syria haven’t been announced, but it’s already being dubbed “Geneva 2″ because a similar event was held there a year ago.

On Friday, Russia’s foreign minister said Washington was sending contradictory signals on Syria that could derail an international conference intended to end that country’s civil war, warning that U.S. talk about a possible no-fly zone would only encourage the rebels to keep fighting.

Sergey Lavrov also criticized demands that Assad step down. Russian leaders warn that if Assad steps aside, the resulting power vacuum could be quickly filled by al-Qaida connected rebels, who are well-armed and aggressive.

Associated Press

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Kerry: Political solution urgently needed in Syria

Organ solution? More donors

Murnaghan family

Sarah Murnaghan, 10, shown with her parents Janet and Francis Murnaghan, has cystic fibrosis and needs a lung transplant. A judge last week ruled that she could be more easily considered for adult lungs.

By JoNel Aleccia, Senior Writer, NBC News

As soon as word spread that little Sarah Murnaghan needed a lung transplant, the offers started rolling in.

Not from the families of deceased donors who might save the life of the 10-year-old Pennsylvania girl with cystic fibrosis, but from concerned strangers who saw or heard the child’s plight in national news stories and wanted to do something — anything — they could.

“I was looking at her picture and that just touched my heart and I got tears,” said Daniel Barr, 60, an ex-Marine from Cecil, Ark., who offered to volunteer his own lung for Sarah. “I just wanted to jump up and say, ‘Here, take it!’”

Hundreds of people shared Barr’s sentiment, even though the girl’s family said that she wasn’t suitable for a living lung donation. What many may not have shared is Barr’s longtime designation as an organ donor — and not just for Sarah.

“I’ve been one just about forever,” said Barr, who lost his own daughter, Kelly Nichole, in 1991, and donated her heart and eyes. “I wish more people would. You could really cut the backlog of people waiting – and dying.”

Only about 45 percent of adults in the U.S. — nearly 109 million people — are organ donors, a figure that donation and transplant experts say seems tragically low when the public’s attention is riveted on the lack of organs for a child such as Sarah.

“We have millions of people that are concerned or outraged about this particular situation, yet 55 percent don’t sign up to donate,” said David Fleming, the president and chief executive of Donate Life America, a transplant advocacy agency that tracks U.S. donors.

The proportion of adults signed up as organ donors varies surprisingly widely across the U.S., from Montana, where 82 percent of people older than 18 are designated donors, to New York, where 20 percent are signed up. In Vermont, the figure is only 5 percent.

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People typically sign up for organ donation when they acquire or renew driver’s licenses, and state motor vehicles departments keep track of the records. But it’s also possible to register online any time, driver’s license or no. 

The biggest barrier to registering is procrastination — tempered with a little denial, said Sharon Ross, a spokeswoman for the San Diego affiliate of Donate Life.

“I think we, as a nation, as a whole, don’t think about death or want to think about death,” she said. “Many of our deaths are unexpected and sudden and we just don’t take the time to sign up.”

But when a situation like Sarah Murnaghan’s arises, it suddenly commands attention. 

“It really puts a face on the need,” said Fleming. “I have a 10-year-old daughter. If my 10-year-old daughter needed an organ,  I would be doing anything in my power to save her life.”

More than 118,000 people are waiting for organs, including nearly 76,000 who actively need them now, according to OPTN. About 18 people die every day awaiting transplants.

“People sometimes believe that organ allocation is the primary issue, when in reality, the crisis is the lack of supply of organs for transplant,” Fleming said.

Indeed, the focus for two weeks has been on the complicated two-tier system that governs the way children and adults receive organs. Created by the Organ Procurement and Transplantation Network, or OPTN, it limits kids younger than 12 to organs from other children of similar age and size and gives teens and adults first chance at adult organs – even if the youngest kids are sicker.

Transplant experts say the 2005 rule replaced a first-come, first-served system and cut waiting list deaths by 40 percent.

But Sarah’s parents challenged the rule, saying it denied their child the chance to compete for an adult organ based on the severity of her illness instead of her age.

They launched a massive PR campaign that garnered headlines, political backing and, on Wednesday, a judge’s rule ordering Health and Human Services Secretary Kathleen Sebelius to direct OPTN to put the child on the adult list.

By Thursday, another child awaiting a lung transplant, 11-year-old Javier Acosta, had been bumped up by the court as well.

Surgeons and ethicists objected to the move, saying it undermined a system designed to be impervious to individual cases and that it allowed non-doctors to make medical decisions.

“The whole point of having rules is to avoid special pleading,” said Art Caplan, director of the division of medical ethics at NYU Langone Medical Center and a frequent NBC News contributor.

Making exceptions to the system also reinforces a common suspicion that celebrities, the wealthy and people with the right ties have an inside track on organ transplant, Fleming said. “If it continues on this path, it is setting a dangerous precedent.”

Donation advocates say there’s one certain way to avoid what Sebelius described as the “incredibly agonizing” situation of having to ration organs: Get people to donate.

“We certainly believe that if everyone were a registered donor, it could double the number of transplants each year,” said Fleming, noting it would boost last year’s 28,000 transplants to more than 56,000.

John Makely / NBC News

Detail of a New York state driver’s license organ donor mark.

That wouldn’t erase the waiting list, but it would go a long way toward satisfying the need. Each person who agrees to donate organs can help as many as eight recipients, experts say.

No one knows for sure the size of the pool of potential donors, Fleming said. Organs are harvested from people who are brain dead, or in certain cases, whose hearts have stopped, but conditions from disease to the manner of death can render many potential transplants useless.

Less than 1 percent of the 2.5 million people who die each year in the U.S. may provide viable organs, experts say. That makes it even more crucial to encourage every possible registration, a task that has occupied transplant centers and donation advocate for decades.

They work hard to rebut common myths about organ donation designation, including this one: ER doctors won’t work as hard to revive potential donors in a crisis.

“We hear that all the time,” said Fleming. “I have friends who are registered donors who wink and say, ‘Will they really try to save me?’”

Minority groups including blacks, Hispanics and Asians are often reluctant to donate, primarily because of religious or cultural reservations, experts say. White people account for about two-thirds of all organ donations.

There are strong regional leanings as well. All across the rural West — Alaska, Washington, Oregon, Montana — organ donation designations are high, 74 percent or higher.

“There are some areas of the country that have a very strong sense of community and commitment to your neighbor,” Fleming said. “In some urban centers, you may not know your neighbor.”

OPTN executive members plan to meet Monday to consider the way pediatric lungs are allocated. The outcome may or may not help Sarah Murnaghan and other children like her, but organ experts say one thing will.

“The real message is this,” Fleming said. “If you feel discomfort or outrage for this young woman, the real response, the way to provide hope to people like Sarah is to become an organ donor.” 

Related stories: 

• Second child files suit for transplant, gets on list


• Judge orders girl added to transplant list


• Dying girl, 10, spurs fight over lung transplant fairness

Organ solution? More donors

Solution to News Feed Censorship on Facebook

The 1-penny Sequestration Solution, Brennan defends drone policies, McCain: Grand Inquisitor, Colbert/Clinton huddle with House Dems, Labrador sacks spox, Jail time for Jackson Jr.?

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THE ROGERS REPORT: THE 1-PENNY SEQUESTRATION SOLUTION – “Washington is in a swivet these days over across-the-board cuts March 1 that threaten to wreak havoc with domestic agencies and military readiness. But the reality is that if every American were to get one penny less on each dollar of government benefits and pay one penny more on each dollar of taxes, the budget improvement would be almost the same,” David Rogers writes for the hometown paper. Indeed, based on new estimates this week, just a 1 percent increase in revenues and a 1 percent cut in spending would add up to more than $ 800 billion over 10 years — roughly the same as the almost $ 790 billion in appropriations cuts in the March sequester.

– “Old budget hands hate such simplistic formulas. But does one across-the-board approach deserve another? And could the March sequester be replaced by such an alternative that would spread the pain more broadly and reduce the disruptions?” http://politi.co/11tF1Jv

DEMS PLOT PLAN TO WIN SEQUESTRATION WAR – POLITICO’s Manu Raju reports: “Senate Democrats are digging in against Republican calls for deeper spending cuts by bringing out some of their favorite punching bags: corporate jets, Wall Street and Big Oil. With the automatic budget cuts in the sequester coming up next month, Democrats hope to vote on an alternative plan to raise taxes on some of their favorite boogeymen in hopes of shifting the blame when the GOP inevitably rejects it. Majority Leader Harry Reid of Nevada, Budget Committee Chairwoman Patty Murray of Washington, Finance Committee Chairman Max Baucus of Montana and Appropriations Committee Chairwoman Barbara Mikulski of Maryland met Thursday to map out their options and plan their public rollout.

– “The Democratic public pressure campaign is expected to begin in earnest next week, starting with President Barack Obama’s State of the Union address on Tuesday and a Senate Appropriations Committee hearing expected Thursday at which senior administration officials will most likely sound the alarm that so-called sequestration cuts would devastate the economy. … Democrats are leaning toward a plan that would be split 50-50 between spending cuts and tax hikes, financed in large part by new taxes on corporate and wealthy taxpayers.” http://politi.co/11tF1sT

– Democrats are confident the GOP will get the blame if the cuts take effect, so much so they’re already eyeing at least 10 Republican-held House seats with strong military connections from Florida to California to target in 2014, POLITICO’s Darren Samuelsohn reports.” http://politi.co/XViFtK

Washington Post, A1, “Brennan defends drone policies … Heated exchange won’t derail confirmation,” By Greg Miller: “A Senate hearing on the nomination of John O. Brennan to serve as CIA director exposed deep skepticism of key aspects of the Obama administration’s approach to fighting terrorism, including its unprecedented reliance on targeted killing and the secrecy it maintains around the exercise of that lethal power. Brennan, who served as the White House’s top counterterrorism adviser for the past four years, was challenged in often blunt terms to explain why under President Obama the number of drone strikes has soared while captures of terrorism suspects have dwindled to single digits. He was prodded to defend the administration’s refusal to provide basic information, including the death toll in drone strikes, and was asked to square his assertion that he opposed the CIA’s use of brutal interrogation measures with not trying to stop them while he was in the agency’s leadership ranks during the George W. Bush administration.

–“The hearing was one of the most heated sessions for a CIA nominee over the past decade …  Brennan delivered a confident and at times combative defense of his record and the administration’s decisions, and emerged from the session on course to be confirmed for the CIA job, perhaps as early as next week. But Brennan, whose opening remarks were interrupted repeatedly by protesters in the audience, also expressed dismay with the way the administration’s actions have been perceived. Defending the drone campaign, he said, ‘We only take such actions as a last resort, to save lives when there is no other alternative.’” http://wapo.st/XrlwL3

– Chairwoman Dianne Feinstein was forced to clear the hearing room after protesters disrupted Brennan’s opening remarks five separate times: http://bit.ly/XZ9GpI

– POLITICO’s Josh Gerstein offers four takeaways from Brennan’s grilling Thursday: 1) Senators were looking for a piñata. 2) Drones are here to stay. 3) The campaign is over, but attacking Obama for leaks is not. 4) Torture remains bitter topic. Read his piece here: http://politi.co/11txiLp

LEAHY, GRASSLEY QUESTION W.H. ON TARGETED KILLINGS  – Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) and ranking member Chuck Grassley (R-Iowa) have sent a letter to President Barack Obama urging him to share any legal memos on the targeted killings of Americans abroad.  The Senators’ bipartisan request came one day after the Administration’s decision to share classified legal opinions justifying the president’s ability to authorize the targeted killings of American citizens with the Senate and House Intelligence committees.

– “The deliberate killing of a United States citizen pursuant to a targeted operation authorized or aided by our Government raises significant constitutional and legal concerns that fall squarely within the jurisdiction of the Committee,” Leahy and Grassley wrote.  “Given the important constitutional issues implicated by the targeted killing of U.S. citizens by our Government, and given our Committee’s jurisdiction over these issues and the Department, we respectfully request that you direct the Department to promptly provide our Committee with access to unredacted copies of any and all legal opinions drafted by OLC that pertain to the targeted killing of U.S. citizens abroad.” Read the letter here: http://1.usa.gov/14Hwi4k

MENENDEZ DONOR PROBED FOR BILLING MEDICARE FOR TREATMENTS PATIENTS DIDN’T NEED – Jay Weaver and Marc Caputo write on A1 of the Miami Herald: “A South Florida eye surgeon who’s a friend of a U.S. senator is under federal criminal investigation for billing Medicare millions of dollars to treat elderly patients for services they may not have needed, The Miami Herald has learned. Federal agents began investigating Dr. Salomon Melgen last year, sources say, after investigators suspected he overbilled the taxpayer-funded health program by overprescribing a high-priced drug called Lucentis, which is injected into patients’ eyes. Several sources familiar with the doctor’s practice said he used the drug, which costs $ 2,000 a vial, to treat patients with macular degeneration more than any other ophthalmologist in Florida and possibly the country. His high patient volume also raised red flags for investigators, the sources said.  …

– “Melgen, whose lawyers have denied any wrongdoing, finds himself in the middle of two federal investigations: His Vitreo-Retinal eye clinics in West Palm Beach and two other South Florida sites were raided last week by agents with the FBI and the Department of Health and Human Services, who are investigating possible Medicare fraud.  A separate FBI investigation revolves around the doctor’s relationship with U.S. Sen. Robert Menendez, D-N.J., and the trips they took on his private plane to Melgen’s villa at a resort in the Dominican Republic. Melgen donated more than $ 750,000 last year to Menendez’s reelection campaign and other political committees and candidates.” http://hrld.us/V3uWh6 Front-page image: http://bit.ly/Yfc64h

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GOOD FRIDAY MORNING, FEBRUARY 8, 2013, and welcome to The Huddle, your play-by-play preview of the day’s congressional news. Send tips, suggestions, comments, complaints and corrections to swong@politico.com. If you don’t already, please follow me on Twitter @scottwongDC.

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TODAY IN CONGRESS – Both the House and Senate are out today. The Senate is back at 2 p.m. Monday and will vote at 5:30 p.m. on a series of amendments to the Violence Against Women Act. A vote on final passage could come as early as Monday night.

OFF THE HILL – At 11 a.m., Sen. Ben Cardin, a member of the Finance committee, will hold a town hall with employees at the National Institutes of Health headquarters in Bethesda, Md.

McCAIN: THE GRAND INQUISITOR – Jonathan Allen reports for POLITICO: “It usually takes a lot to rattle the Pentagon’s top brass, but John McCain’s got a knack for doing just that. Since returning to the Senate after his failed 2008 presidential bid, McCain has settled into the role of his party’s chief inquisitor on military issues and foreign affairs, a position that has given him new life as an informal leader among his GOP colleagues. Never has that status been more evident than in his aggressive questioning at three recent hearings on the Sept. 11, 2012, terrorist attacks on America’s consulate in Benghazi and a nearby U.S. facility. On Thursday Martin Dempsey, the highest-ranking military officer in the land, found just how deep McCain’s frustration runs the hard way at an Armed Services Committee hearing on the assault, which killed four Americans, including Ambassador Chris Stevens.” http://politi.co/XVizlZ

OBAMA BLOCKED REBEL ARMS – Adam Entous writes the A1 lead for the Wall Street Journal: A proposal to arm Syrian rebels was backed by the Pentagon, the State Department and the Central Intelligence Agency, but the White House decided not to act on the plan. Defense Secretary Leon Panetta and Gen. Martin Dempsey, the chairman of the Joint Chiefs of Staff, revealed publicly for the first time at a Senate hearing on Thursday that they supported the proposal last year by senior officials including then-Secretary of State Hillary Clinton and then-CIA director David Petraeus. The officials came to favor the plan last year with the meltdown of an international diplomatic initiative to end the Syrian civil war, according to current and former officials involved in the deliberations. The White House stalled the proposal because of lingering questions about which rebels could be trusted with the arms, whether the transfers would make a difference in the campaign to remove Syrian leader Bashar al-Assad and whether the weapons would add to the suffering, the U.S. officials said.” http://on.wsj.com/YJifaW

HOUSE DEMS NEW REALITY: THEY MATTER – Jeremy Peters reports for the New York Times from the retreat in Leesburg, Va.: “After more than two trying years in the political wilderness, House Democrats who gathered here for their annual retreat are starting to appreciate a new political reality that few of them expected: They matter. It is one of the more notable aspects of the current House of Representatives, which is still controlled by Republicans and more deeply partisan than ever. With Democrats now in control of 200 seats, a handful more than they had in the last Congress, and Republicans often sharply split on big issues like spending and taxes, Democratic votes have been decisive in getting major legislation through the House.  Other issues that are equally threatening to Republican unity like gun laws and immigration changes will likely be on the agenda early this year, giving Democrats what they hope will be an even bigger opportunity to play a pivotal role both in shaping legislation and in deciding its fate.

– “So far this year, two major bills — the multibillion dollar Hurricane Sandy aid package and the fiscal compromise that let tax rates on high-earners rise — have made it through the House without a majority of Republicans voting yes. That left Democrats as the ones who provided the needed votes.” http://nyti.ms/UJoMVP

And POLITICO’s Kate Nocera reports that Democrats are fully embracing Obama: “At their retreat in Leesburg, Va., this week, lawmakers positively beamed while listening to President Barack Obama speak on Thursday, erupting into applause and snapping photos with their iPhones. In fact, Obama told them, if House Democrats stick with him, he expects ‘Nancy Pelosi to be speaker again.’ That’s a long way up for a party that was depressed and downtrodden — and is still in the minority after devastating losses in the 2010 elections. Judging by their enthusiasm at the retreat this week, it seems hard to remember the Democrats of two years ago, who viewed Obama as something of a dead weight on their reelection chances.” http://politi.co/11tF08c

– Pelosi will interview comedian Stephen Colbert today at the retreat, while President Bill Clinton will also address House Democrats, The Hill’s Russell Berman reports: http://bit.ly/YJminO

CONGRESS MEMBERS’ KIDS BEHAVING BADLY – Alex Isenstadt reports for POLITICO: “The cases sound like the blotter entries at a busy police station: Assault. Drug possession. DUI. Breaking and entering. Carrying a weapon. Except the alleged perpetrators aren’t your typical troublemakers — they’re the children of members of Congress. One after another in recent weeks has been posing for a mug shot, generating embarrassing headlines and causing their prominent parents plenty of heartburn. In December, Patrick Moran, the 23-year-old son of Rep. Jim Moran (D-Va.), was arrested outside a Washington bar for allegedly slamming his girlfriend’s head into a metal trash can after she confronted him for talking to another woman. … Last month came news of another alleged assault: William Paul, the 19-year-old son of Sen. Rand Paul (R-Ky.), was arrested for allegedly using physical force with a female flight attendant. … Next up was the son of Rep. John Barrow (D-Ga.), James Barrow. Cops found a small amount of marijuana in his car when he was pulled over for speeding. …

– “Lots of parents toss and turn at night, worrying that their kids’ rebellious behavior might cross the line to something worse. As it turns out, members of Congress are no different.  … The rash of recent headlines shines a harsh spotlight inside the political fishbowl — a place where an embarrassing incident that for most families would remain private turns public in a flash.” http://politi.co/XaOIIf

LABRADOR SACKS SPOX AFTER NAUGHTY TWEET – The Idaho Statesman reports: “Immediately deleted: The tweet, ‘Me likey Broke Girls,’ was deleted after 14 seconds. But that was long enough for Phil Hardy to lose his job as Rep. Raul Labrador’s spokesman. Super Bowl ad: The tweet followed a CBS promo featuring Kat Dennings and Beth Behrs, the stars of ‘2 Broke Girls,’ pole-dancing in revealing clothing. The Idaho Republican’s office apologized Monday, saying Hardy mistakenly used Labrador’s Twitter account. Heavy metal background: Hardy worked in the music industry before coming to Idaho. A Labrador aide confirmed the firing, but neither the congressman nor Hardy could be reached for comment.” http://bit.ly/V3xP1u

SNEED: JACKSON JR. PLEA DEAL OFFER INCLUDES ‘SIGNIFICANT JAIL TIME’ – Michael Sneed writes for the Chicago Sun-Times: “Sneed has learned a plea deal is now on the table between former Rep. Jesse Jackson Jr. and federal authorities probing allegations of campaign fund misuse. Sneed is told the plea deal includes Jackson serving time in federal prison. ‘Significant jail time is now definitely a part of the deal,’ said a top Sneed source close to the probe. ‘But I think [Jackson’s wife] Sandi, feels like she was thrown under the bus by her husband,’  now that a separate probe has begun on her, a second source added. Sandi Jackson claims she was stunned by campaign finance abuse disclosures against her husband, who has been treated for mental disorders and allegedly spent $ 40,000 on a Rolex watch purchased with campaign funds. This disclosure follows in the wake of an exclusive report Tuesday by Sneed and Sun-Times political reporter Natasha Korecki, revealing the feds’ financial probe of the once-politically powerful Jackson couple has evolved into two separate investigations, with federal authorities now taking an independent look at former Ald. Sandi Jackson.” http://bit.ly/XsBZgh

SCHUMER: WORKHORSE, SHOW HORSE – Todd Purdum profiles the New York Democrat in Vanity Fair: “In the circus that is the United States Senate, there have always been two kinds of horses, work and show. Like Dr. Dolittle’s pushmi-pullyu, Chuck Schumer is that rarest of two-headed breeds: he is both a show horse and a workhorse. That’s never been a secret to the New Yorkers who’ve followed his career with care (and occasional exhaustion) for more than 30 years now. But it’s become especially apparent in recent weeks as Schumer has emerged as a key figure on the national stage on two of the biggest legislative issues bedeviling Washington and the country: guns and immigration.

– “In the wake of the Sandy Hook shootings, Schumer reached out to Senate colleagues of both parties who have been strong advocates of gun rights—including Joe Manchin of West Virginia, Tom Coburn of Oklahoma, and Mark Kirk of Illinois—to see if there isn’t room for compromise on questions such as tighter background checks, limits on magazine size, or closing the loophole that allows weapons to be sold at gun shows without a criminal background check. Details of their negotiations have been scant, but the mere fact that they are talking is a near miracle. … It’s easy to mock Schumer. He’s the world’s biggest publicity hound, famous for chewing through press secretaries. A standing joke in Washington: What’s the most dangerous place on Capitol Hill? Between Chuck Schumer and a television camera. He is an observant Jew but hardly an exponent of that maxim from the Book of Ecclesiastes, the one about “a time to keep silence.” He is serially monomaniacal, waking each day freshly appalled by some new outrage and vowing to do something—anything—about it. ‘Inaction is perhaps the greatest mistake of all,’ he once said, and he meant it.” http://vnty.fr/VL4Cef

‘BLOOD FEUD’: BACA SEEKS REVENGE IN 2014 – Kyle Trygstad reports for Roll Call: “The first congressional grudge match of the 2014 cycle has launched in California’s Inland Empire. Redistricting, ambition and dynasty politics laid the groundwork there last year for the unceremonious end to former Rep. Joe Baca’s two-decade reign. His fellow California Democrat, freshman Rep. Gloria Negrete McLeod, took advantage of a new top-two primary system and a redrawn district to defeat the six-term incumbent by a remarkable 12 points. But to the surprise of few, the ambitious Baca wants back in, adding a new chapter to what some local observers have dubbed a ‘blood feud’ between the two politicos. Baca, one of seven California incumbents to lose in 2012, blamed his defeat in the vast exurbs east of Los Angeles on $ 3.3 million in outside spending. In the final weeks of the campaign, a super PAC controlled by New York Mayor Michael Bloomberg launched the multimillion-dollar campaign targeting Baca’s conservative record on gun control.” http://bit.ly/VL5PT4

GOP STATE REP. JUMPS INTO MASS. SENATE RACE – Bob Salsberg writes for the AP: “Massachusetts Rep. Daniel Winslow said Thursday he would run in the upcoming special election for the U.S. Senate, giving Republicans a candidate for the seat after former Sen. Scott Brown and other high-profile party members declined to enter the race. Winslow, a one-time judge who served as chief legal counsel in the administration of former Gov. Mitt Romney, announced his decision in a letter to supporters and GOP activists. He said the next two years represent the ‘last, best opportunity’ to fix a ‘runaway federal deficit and crushing federal debt.’” http://bo.st/14HtAvu

THURSDAY’S TRIVIA WINNER – Jim Brewer and Matthew Erwin correctly answered seconds apart that Sen. Kay Hagan (D-N.C.) gained political campaign experience as a child by placing bumper stickers for her uncle, Lawton Chiles, who served as both governor and senator of Florida.  Also, a minor correction: It was David Torre who offered the trivia question.

TODAY’S TRIVIA – David Albert has today’s question: Name the person who succeeded his grandmother in Congress. First to correctly answer gets a mention in the next day’s Huddle. Email me at swong@politico.com.

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POLITICO – Top 10 – Huddle

The 1-penny Sequestration Solution, Brennan defends drone policies, McCain: Grand Inquisitor, Colbert/Clinton huddle with House Dems, Labrador sacks spox, Jail time for Jackson Jr.?