S'pore & Indian armies conduct joint exercise in India






SINGAPORE: The Singapore Armed Forces (SAF) and the Indian Army (IA) have conducted a bilateral artillery exercise in Devlali, India.

The two-week exercise from 24 November to 8 December, codenamed Agni Warrior, saw the two armies carrying out combined artillery live-firing.

The Defence Ministry said the exercise has enhanced the mutual understanding and interoperability between the two armies.

It added Exercise Agni Warrior is conducted under the ambit of the Bilateral Agreement for Joint Army Training and Exercises between both armies.

Apart from bilateral exercises, the SAF and the Indian Armed Forces also interact regularly through visits, courses, seminars and other professional exchanges.

- CNA/xq



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India misguided, paranoid over China: Guha

MUMBAI: A good half-hour into the discussion on 'India, China and the World', historian Ramachandra Guha issued a disclaimer—all the three members on the panel had been to China only once. "We should learn their language, promote quality research, and have a panel on China driven by Chinese scholars," he said. And that was the general tenor of the debate—that the Indian attitude to China was influenced by a mix of ignorance, cautious optimism about partnerships and a whole lot of misguided paranoia. "Don't demonise the Chinese, please," Guha finally said in response to a question.

"China has existed in our imaginations," observed Sunil Khilnani, professor of politics and author of The Idea Of India. "There's been very little sustained engagement with the reality of China and very little of our own produced knowledge about China." It was after the events of 1962 ('war' in the popular imagination, 'skirmish' to the scholars participating in the discussion), explained Khilnani, that a miffed India "withdrew". It's the 50th anniversary of that exchange this year, and "what we haven't been able to do is learn from the defeat", observed Khilnani. Both could have benefited from greater engagement. "China has had a very clear focus on primary education and achieved high levels of literacy before its economic rise. It has also addressed the issue of land reform," said Khilnani. Guha added that China could learn from the "religious, cultural and linguistic pluralism" in India.

But China and India weren't always so out of sync with each other. Srinath Raghavan, a scholar of military history, got both Guha and Khilnani to talk about pre-1962 relations between the two when the picture was rosier. Tagore was interested in China and so was Gandhi. Both were very large countries with large populations and shared what Guha calls a "lack of cultural inferiority". "They were both," he continued, "also heavily dependent on peasant communities." Nehru was appreciative of China's will to modernize and industrialize and its adoption of technology to achieve those ends. In turn, Chinese politicians argued for Indian independence.

Things soured more, feel both Khilnani and Guha, after the Dalai Lama fled to India in 1959. "He was welcomed here as a spiritual leader but the intensification of the conflict dates to the Dalai Lama's flight," said Guha. Both Guha and Khilnani argued that Nehru's decision to not react aggressively to China's occupation of Tibet was, in the long run, the right one and prevented further "militarization" of the region. An audience member wondered if that didn't make India "China's puppet". Guha disagreed. "If there's a Tibetan culture alive today," he said, "it's not because of Richard Gere. Don't believe in the hypocrisy of the Western countries. Will they give them land, employment, dignified refuge? The Tibetans is one of the few cases in which our record is honorable."

But the difference in levels of development and the lopsided trade relations between the two countries have only fuelled the suspicions many Indians seem to harbour about China. People were worried, said Guha, even about cricket balls made in China. Audience questions reflected those worries. A member asked about China's "strategy to conquer the world" and its likely impact on India. Guha cautioned against stereotypes; Khilnani explained, "History is littered with the debris of states that have tried to dominate the world. What we're doing may be more long-lasting."

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Smokers celebrate as Wash. legalizes marijuana


SEATTLE (AP) — The crowds of happy people lighting joints under Seattle's Space Needle early Thursday morning with nary a police officer in sight bespoke the new reality: Marijuana is legal under Washington state law.


Hundreds gathered at Seattle Center for a New Year's Eve-style countdown to 12 a.m., when the legalization measure passed by voters last month took effect. When the clock struck, they cheered and sparked up in unison.


A few dozen people gathered on a sidewalk outside the north Seattle headquarters of the annual Hempfest celebration and did the same, offering joints to reporters and blowing smoke into television news cameras.


"I feel like a kid in a candy store!" shouted Hempfest volunteer Darby Hageman. "It's all becoming real now!"


Washington and Colorado became the first states to vote to decriminalize and regulate the possession of an ounce or less of marijuana by adults over 21. Both measures call for setting up state licensing schemes for pot growers, processors and retail stores. Colorado's law is set to take effect by Jan. 5.


Technically, Washington's new marijuana law still forbids smoking pot in public, which remains punishable by a fine, like drinking in public. But pot fans wanted a party, and Seattle police weren't about to write them any tickets.


In another sweeping change for Washington, Gov. Chris Gregoire on Wednesday signed into law a measure that legalizes same-sex marriage. The state joins several others that allow gay and lesbian couples to wed.


The mood was festive in Seattle as dozens of gay and lesbian couples got in line to pick up marriage licenses at the King County auditor's office early Thursday.


King County and Thurston County announced they would open their auditors' offices shortly after midnight Wednesday to accommodate those who wanted to be among the first to get their licenses.


Kelly Middleton and her partner Amanda Dollente got in line at 4 p.m. Wednesday.


Hours later, as the line grew, volunteers distributed roses and a group of men and women serenaded the waiting line to the tune of "Chapel of Love."


Because the state has a three-day waiting period, the earliest that weddings can take place is Sunday.


In dealing with marijuana, the Seattle Police Department told its 1,300 officers on Wednesday, just before legalization took hold, that until further notice they shall not issue citations for public marijuana use.


Officers will be advising people not to smoke in public, police spokesman Jonah Spangenthal-Lee wrote on the SPD Blotter. "The police department believes that, under state law, you may responsibly get baked, order some pizzas and enjoy a 'Lord of the Rings' marathon in the privacy of your own home, if you want to."


He offered a catchy new directive referring to the film "The Big Lebowski," popular with many marijuana fans: "The Dude abides, and says 'take it inside!'"


"This is a big day because all our lives we've been living under the iron curtain of prohibition," said Hempfest director Vivian McPeak. "The whole world sees that prohibition just took a body blow."


Washington's new law decriminalizes possession of up to an ounce for those over 21, but for now selling marijuana remains illegal. I-502 gives the state a year to come up with a system of state-licensed growers, processors and retail stores, with the marijuana taxed 25 percent at each stage. Analysts have estimated that a legal pot market could bring Washington hundreds of millions of dollars a year in new tax revenue for schools, health care and basic government functions.


But marijuana remains illegal under federal law. That means federal agents can still arrest people for it, and it's banned from federal properties, including military bases and national parks.


The Justice Department has not said whether it will sue to try to block the regulatory schemes in Washington and Colorado from taking effect.


"The department's responsibility to enforce the Controlled Substances Act remains unchanged," said a statement issued Wednesday by the Seattle U.S. attorney's office. "Neither states nor the executive branch can nullify a statute passed by Congress."


The legal question is whether the establishment of a regulated marijuana market would "frustrate the purpose" of the federal pot prohibition, and many constitutional law scholars say it very likely would.


That leaves the political question of whether the administration wants to try to block the regulatory system, even though it would remain legal to possess up to an ounce of marijuana.


Alison Holcomb is the drug policy director of the American Civil Liberties Union of Washington and served as the campaign manager for New Approach Washington, which led the legalization drive. She said the voters clearly showed they're done with marijuana prohibition.


"New Approach Washington sponsors and the ACLU look forward to working with state and federal officials and to ensure the law is fully and fairly implemented," she said.


___


Johnson can be reached at https://twitter.com/GeneAPseattle


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Federal Agencies Brace for Deep Cuts Post-'Cliff'


Dec 7, 2012 4:22pm







gty barack obama john boehner ll 121206 wblog Federal Agencies Brace for Deep Cuts Post Cliff

Toby Jorrin/AFP/Getty Images


With the “fiscal cliff” quickly approaching, federal agencies are stepping up preparations for deep automatic budget cuts that will kick in Jan. 2 unless the White House and Congress can reach a deal.


The Office of Management and Budget told ABC News that a memo went out to federal agencies earlier this week seeking “additional information and analysis” in order to finalize spending cuts required if we go off the cliff.


The agencies are considering which workers to furlough, projects to put on hold and offices that will have to close.


The request follows the administration’s release of a 400-page report in September that outlined the budget areas to be impacted by the $1.2 trillion in automatic spending cuts and what percentages they would be slashed.


READ MORE: White House Details ‘Doomsday’ Budget Cuts


Billions of dollars could be slashed from defense operations and maintenance programs. Medicare would take a two-percent hit, trimming millions in payouts to health care providers. Scientific research programs would be gutted. Aid for the poor and needy would be sharply curtailed.


The report also detailed operations that would be exempt from any cuts, including active-duty military operations, nuclear watchdogs, homeland security officials, veterans care and other critical areas.


READ: Pentagon Begins Planning for ‘Cliff’ Cuts


Asked about the agency preparations underway, White House spokesman Jay Carney said Wednesday that OMB “must take certain steps to ensure the administration is ready to issue such an order should Congress fail to act.”


“Earlier this week, OMB issued a request to federal agencies for additional information to finalize calculations on the spending reductions that would be required,” Carney said.


“This action should not be read … as a change in the administration’s commitment to reach an agreement and avoid sequestration.  OMB is simply ensuring that the administration is prepared, should it become necessary to issue such an order,” he said. “OMB will continue to consult with agencies and will provide additional guidance as needed.  This is just acting responsibly because of the potential for this happening.”


Get more pure politics at ABCNews.com/Politics and a lighter take on the news at OTUSNews.com.


More ‘Fiscal Cliff’ Coverage From Today:




SHOWS: World News







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Egypt struggle seen costing Mursi, even if he wins


CAIRO (Reuters) - The crisis unleashed by President Mohamed Mursi's bid to wrap up Egypt's transition on his own terms has eroded his nation's faith in their nascent democracy and will complicate the already unenviable task of government.


His effort to drive through a constitution against the wishes of major sections of society, including a Christian minority, has damaged prospects for building consensus needed to tackle challenges ahead, such as fixing a broken economy.


Having promised to be a president for all, Mursi stands accused of putting the interests of his group, the Muslim Brotherhood, ahead of others who say their aspirations are not reflected in the draft to be put to a December 15 referendum.


On the other side, suspicions harbored by Islamists towards their secular-minded opponents have only deepened as a result of the turmoil ignited by Mursi's effort to fast-track the final stage of the transition from Hosni Mubarak's rule.


With the more extreme among them opposed to the very notion of democracy, the Islamists say their rivals are not respecting the rules of the game that put them in the driving seat by winning free and fair elections.


People anxious to see Egypt recover from two years of turbulence fear bad blood could persist and squash hopes for cooperation needed to help Mursi rule smoothly and deliver much-needed reforms.


"If they succeed in the referendum, they will see that as a step forward, but not without cost," said a Western diplomat.


Though Mursi won international praise for mediating a truce in Gaza, the violence on his own streets worries the West and particularly the United States, which has given Cairo billions of dollars in military and other aid since Egypt made peace with Israel in 1979. U.S. President Barack Obama told Mursi on Thursday of his "deep concern" about casualties during protests.


A victim of the polarization could be the Brotherhood's plans to forge electoral alliances with liberals in forthcoming parliamentary polls. The head of the Brotherhood's Freedom and Justice Party told Reuters this week he saw such alliances as preferable to an ideological tie-up with other Islamists.


The divisions are now playing out in the streets. Seven people were killed and hundreds wounded this week in clashes between Islamists and their rivals. A call by Mursi for dialogue was rebuffed by activists who are to protest again on Friday.


"We said that this state of polarization, if it was not dealt with properly, would reach this point, and it has," said Ayman Al-Sayyad, who quit his post as a Mursi adviser on Wednesday following an eruption of violence.


"This was the scene that we were trying to avoid," he added in an interview with al-Hayat television.


The inclusive image Mursi had tried to build around his administration was one of the first victims of the crisis that mushroomed following a November 22 decree that expanded his powers and protected his decisions from judicial review.


RESIGNATIONS


A Christian and a woman were among the first to resign from his staff, as surprised by the decree as most Egyptians. Despite an early bout of violence, Mursi showed no sign of wavering and appeared to brush off his critics.


"I see things more than they do," he told Time.


With speculation swirling around how he took the decision, Egyptians long suspicious of the Brotherhood have concluded Mursi is running the country at the group's command.


In response, the Islamists complain that many of Mursi's attempts at outreach were rebuffed early on. Their view of the opposition has grown dimmer through the crisis. Brotherhood members have started to dismiss opponents as "feloul", meaning "remnants" - a pejorative implying loyalty to Mubarak.


"The really unfortunate side effect of the last two weeks is the political atmosphere has become really toxic. I fear that could endure long past the current crisis," said Elijah Zarwan, a fellow with the European Council on Foreign Relations.


"The next government is going to have to move very quickly to address many problems and it will need cooperation. In the current atmosphere, it is hard to imagine others cooperating."


Such cooperation will be at a premium for introducing policies aimed at reining in a crushing budget deficit and staving off a balance of payments crisis. Egypt's economy has lost $70 billion to $80 billion of economic output since Mubarak was ousted, in one economist's estimate.


Top of the economic to-do list are measures to cut back on fuel subsidies - one of the biggest drains on state finances. Tweaks to such support are bound to be unpopular in a nation where both rich and poor have grown used to cheap petrol.


"He has inherited an economy that is weak and needs serious surgery, so he is going to have to make controversial decisions over the next year or so," said Simon Kitchen, strategist at EFG-Hermes, an Egyptian investment bank.


"Ideally you want to do that in an environment where you have some sort of political consensus," he said.


"THEY BURNED THEIR BRIDGES"


Some subsidy reform and other steps to cut waste are part of a program agreed in principle with the International Monetary Fund for $4.8 billion loan designed to support the budget.


The IMF board meets on December 19 to discuss approval of the loan, which would be seen by investors as a seal of approval for the government's reform program.


Besides the economy, Mursi needs wider backing to tackle other problems including a judiciary which his opponents agree needs overhaul. But even when he sacked the unpopular, Mubarak-era prosecutor general, Mursi was criticized for showing an autocratic streak in the way he went about it.


In the new system of government outlined in the draft constitution, Egypt's next parliament will have a say over the shape of government. A parliamentary election would go ahead some two months later if the constitution is approved in the referendum.


With that in mind, the Freedom and Justice Party is already eyeing alliances to fight the parliamentary election.


FJP leader Saad al-Katatni said in an interview his preference was for an alliance with liberals, not the hardline Islamists whose backing has helped Mursi through the crisis. "Our preferred option is that the alliance not be ideological so that we don't have a split in the nation," he said.


The Brotherhood had kept the nascent hardline Salafi parties at arm's length as they emerged after Mubarak's political demise. That trend has gradually been reversed as the Brotherhood has looked to fellow Islamists for support.


"They burned their bridges with the secular camp and relied heavily on the Salafi camp. We don't feel that is where they naturally want to be right now," said the Western diplomat, speaking on condition of anonymity.


Sentiment from liberal parties suggests the Brotherhood will struggle to convince liberals that it is a trustworthy partner.


"I don't think the man realizes the degree of rebellion and rage the people have," said Ahmed Said, head of the liberal Free Egyptians Party, referring to Mursi. "The country is totally divided and polarized. You have two nations now."


(Writing by Tom Perry; Editing by Peter Graff)



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Laos ratifies WTO membership






BANGKOK: Laos has ratified its membership of the World Trade Organisation, state media said on Friday, the latest step in the small Southeast Asian nation's 15-year effort to join the global body.

The Laotian parliament on Thursday formally gave its approval, paving the way for the country's entrance to the 157-member organisation in early 2013, according to a report in the government mouthpiece Vientiane Times.

It said most lawmakers "supported the government's decision to join the WTO, saying it was a golden opportunity for Laos to benefit from market liberalisation".

The WTO General Council gave its approval for Laotian membership in October, with the organisation's chief Pascal Lamy saying the landlocked communist country had "come a long way since it embarked on the road to membership in 1997".

Laos is one of Southeast Asia's poorest nations and the only one in the region yet to join the WTO. About 28 percent of the population still lives in poverty, according to a 2008 estimate from the World Bank.

The country has enjoyed robust economic growth of more than seven percent a year over the past decade.

Entry into the WTO club brings with it the promise of increased trade volume and new trade partners for Laos, as well as the prospect of fresh investment pouring into the country.

The move is also part of the country's stated ambition to graduate from least developed country status by 2020.

Laos Deputy Prime Minister Thongloun Sisoulith said the move was part of the country's efforts to attract foreign investment, but conceded that membership would increase competition and put pressure on small local firms, the Vientiane Times said.

Since negotiations got under way properly in 2004, Laos has adopted dozens of laws to bring it in line with WTO requirements in areas such as investment, food safety, animal health, import and export procedures and intellectual property rights - a flurry of activity rarely seen in the state.

- AFP/de



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Government wins FDI battle, says reforms on track

NEW DELHI: The UPA government on Friday dealt a major blow to the opposition in the Rajya Sabha by winning a vote on FDI in retail by 14 votes and declared that there was no stopping India's reform process.

In contrast to speculation that the government may lose the vote in the upper house, the victory proved pretty easy as the Samajwadi Party (SP) trooped out — like in the Lok Sabha on Wednesday — while the Bahujan Samaj Party (BSP) voted for foreign direct investment (FDI) in multi-brand retail.

As a disappointed opposition claimed "moral victory" on the strength of the speeches made in the house over two days, parliamentary affairs minister Kamal Nath said after the vote: "Our reforms are on track."

Commerce minister Anand Sharma, the main speaker for the government on the contentious issue, took on the opposition after it said the FDI did not have the support of most MPs even if the final vote went in favour of the treasury benches.

"We challenge them," he said. "If we are a minority government, let them bring a no-confidence motion (against us)."

The opposition-backed motion against FDI in retail got 109 votes while the government managed 123.

One member, cricketer Sachin Tendulkar, was away in Kolkata playing a match against England. But officials admitted there was some confusion on the final voting figures.

Minutes before the voting process began, all nine SP members walked out, bailing out the ruling United Progressive Alliance (UPA) - for a second time in three days.

On Thursday, day one of the debate in the Rajya Sabha, Mayawati took on the Bharatiya Janata Party (BJP) and declared triumphantly that 15 MPs of her BSP would vote with the UPA government.

Both the BSP and SP provide legislative support to the Congress-led government.

The government move to provide 51% foreign equity in multi-brand retail has long been a contentious issue, stalling almost the entire first two weeks of the winter session of parliament.

With Friday's vote, global names like Carrefour, Tesco and Wal-Mart can set up stores in India.

Earlier, addressing the house during the debate, Anand Sharma denied accusations that the FDI decision was a unilateral one and said the government had talked "to everyone, farmers, traders, consumers, states".

The government also held inter ministerial consultations and heard various recommendations, he said.

Some sparks flew during the Rajya Sabha debate, with Anand Sharma's reference to Rajya Sabha member NK Singh kicking up a row and leading to an adjournment.

Sharma spoke about NK Singh having chaired a panel on FDI during the NDA rule. Singh was then principal secretary to then prime minister Atal Bihari Vajpayee.

After the parliament defeat, Communist leader D Raja accused the UPA government of "brazenly" identifying itself "with multinationals and then claims it is with aam admi". "The sense of the house is againstFDI."

The AIADMK gave a "solemn assurance" that the next central government would reverse the FDI decision.

AIADMK leader V. Maitreyan, who moved the motion for the debate in the Rajya Sabha, said the final vote on the issue would be cast by the people in the next election.

"I give a solemn assurance that after the next Lok Sabha elections, the next government will reverse the decision of the UPA.

"FDI will only be on paper and will not be implemented in states," he added.

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Celebrations planned as Wash. legalizes marijuana


SEATTLE (AP) — Legal marijuana possession becomes a reality under Washington state law on Thursday, and some people planned to celebrate the new law by breaking it.


Voters in Washington and Colorado last month made those the first states to decriminalize and regulate the recreational use of marijuana. Washington's law takes effect Thursday and allows adults to have up to an ounce of pot — but it bans public use of marijuana, which is punishable by a fine, just like drinking in public.


Nevertheless, some people planned to gather at 12:01 a.m. PST Thursday to smoke in public beneath Seattle's Space Needle. Others planned a midnight party outside the Seattle headquarters of Hempfest, the 21-year-old festival that attracts tens of thousands of pot fans every summer.


"This is a big day because all our lives we've been living under the iron curtain of prohibition," said Hempfest director Vivian McPeak. "The whole world sees that prohibition just took a body blow."


In another sweeping change for Washington, Gov. Chris Gregoire on Wednesday signed into law a measure that legalizes same-sex marriage. The state joins several others that allow gay and lesbian couples to wed.


That law also takes effect Thursday, when gay and lesbian couples can start picking up their wedding certificates and licenses at county auditors' offices. Those offices in King County, the state's largest and home to Seattle, and Thurston County, home to the state capital of Olympia, planned to open the earliest, at 12:01 a.m. Thursday, to start issuing marriage licenses. Because the state has a three-day waiting period, the earliest that weddings can take place is Sunday.


The Seattle Police Department provided this public marijuana use enforcement guidance to its officers via email Wednesday night: "Until further notice, officers shall not take any enforcement action — other than to issue a verbal warning — for a violation of Initiative 502."


Thanks to a 2003 law, marijuana enforcement remains the department's lowest priority. Even before I-502 passed on Nov. 6, police rarely busted people at Hempfest, despite widespread pot use, and the city attorney here doesn't prosecute people for having small amounts of marijuana.


Officers will be advising people to take their weed inside, police spokesman Jonah Spangenthal-Lee wrote on the SPD Blotter. "The police department believes that, under state law, you may responsibly get baked, order some pizzas and enjoy a 'Lord of the Rings' marathon in the privacy of your own home, if you want to."


Washington's new law decriminalizes possession of up to an ounce for those over 21, but for now selling marijuana remains illegal. I-502 gives the state a year to come up with a system of state-licensed growers, processors and retail stores, with the marijuana taxed 25 percent at each stage. Analysts have estimated that a legal pot market could bring Washington hundreds of millions of dollars a year in new tax revenue for schools, health care and basic government functions.


But marijuana remains illegal under federal law. That means federal agents can still arrest people for it, and it's banned from federal properties, including military bases and national parks.


The Justice Department has not said whether it will sue to try to block the regulatory schemes in Washington and Colorado from taking effect.


"The department's responsibility to enforce the Controlled Substances Act remains unchanged," said a statement issued Wednesday by the Seattle U.S. attorney's office. "Neither states nor the executive branch can nullify a statute passed by Congress" — a non-issue, since the measures passed in Washington and Colorado don't "nullify" federal law, which federal agents remain free to enforce.


The legal question is whether the establishment of a regulated marijuana market would "frustrate the purpose" of the federal pot prohibition, and many constitutional law scholars say it very likely would.


That leaves the political question of whether the administration wants to try to block the regulatory system, even though it would remain legal to possess up to an ounce of marijuana.


Colorado's measure, as far as decriminalizing possession goes, is set to take effect by Jan. 5. That state's regulatory scheme is due to be up and running by October 2013.


___(equals)


Johnson can be reached at https://twitter.com/GeneAPseattle


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Fiscal Cliff Debate Puts Spotlight on Small Businesses












At a sprawling 25,000-square-foot factory outside Dayton, Ohio, David Curliss manufactures high-tech composite fibers, structural adhesives and special sealants known as syntactic foams. The small business he founded a decade ago has grown steadily since the recession, employing 21 workers on several production lines.


But now, with a tax hike on the horizon as part of a deficit-reduction deal as evisioned by President Obama and the Democrats, it may become more difficult to expand his business and hire, Curliss says.


"What it absolutely means is less cash for growth in my business," he told ABC News. "In the worst-case scenario, it means we let someone go or have to reduce benefits."


Curliss is among an estimated 940,000 Americans who will report more than $200,000 in business income on their individual tax returns in 2013 and pay at the top marginal rates, according to the bipartisan Joint Committee on Taxation.


They are now at the center of the political storm over the "fiscal cliff" and debate on whether to raise top income tax rates at the end of the year.


Obama wants the two upper tax brackets to rise from 33 and 35 percent to 36 and 39.6 percent, respectively. Republicans staunchly oppose any increase, largely citing the impact on companies like Curliss'.




Performance Polymer Solutions, like thousands of small businesses, is structured as a so-called "pass-through" entity with the firm's income and profits passed directly to Curliss for reporting on his 1040. The company itself does not pay taxes.


On paper, the extra cash makes Curliss look like a rich man, subjecting his income to the top rates. Yet, he never actually sees the business income in his paycheck, he says. Instead, the money is kept inside the business to help it grow.


"Raising the top rates means there will be less cash in my company to reinvest in employees and benefits and equipment," he said.


Democrats, defending the need for revenue from the top 2 percent of U.S. income earners to help close the budget gap, say cases like Curliss' are the exception not the rule.


"Ninety-seven percent of small businesses would not see any increases in their income taxes," Obama said Thursday. "And even folks who make more than $250,000 would still have a tax break for their incomes up to $250,000."


Just 3 percent of more than 30 million Americans who report business income on their personal returns next year will pay at the top marginal rates, the Joint Committee found.


Many of them, colloquially referred to as "business owners," include independent doctors, lawyers and hedge fund managers whose companies are set up as "pass-through" entities with high incomes and few employees.


Experts say the vast majority of businesses paying taxes through the individual code are very small, make very little money and don't come remotely close to having to pay higher taxes if Obama gets his way.


The average income of a business that reports on an individual tax return is about $40,000, according to the Tax Policy Center.


"Most of these are sole proprietorships and their number of employees is zero," said Howard Gleckman, an analyst with the Center, noting that self-employed taxpayers include babysitters, plumbers and investors.


"All things equal, the lower the taxes, the better off we all are," Gleckman said. "The trade-off, though, is that if you believe the budget deficit is a big economic problem, and if you believe that the ultimate consequence of ongoing high deficits is higher interest rates, well then that's a cost, too."






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Egypt military orders rival crowds to disperse


CAIRO (Reuters) - Egypt's Republican Guard ordered rival demonstrators to leave the area around the presidential palace on Thursday after fierce clashes that killed seven people, and Islamists began to comply.


The presidency announced that the Republican Guard, whose duties include protecting the palace, had set a 3 p.m. (1300 GMT) deadline for supporters and opponents of President Mohamed Mursi to quit an area they had turned into a battleground.


The military played a big role in removing President Hosni Mubarak during last year's popular revolt, taking over to manage a transitional period, but had stayed out of the latest crisis.


Mursi's Islamist partisans had fought opposition protesters well into the early hours during dueling demonstrations over the president's decision last month to expand his powers to help him push through a mostly Islamist-drafted constitution.


A Reuters witness said some of the hundreds of Mursi supporters who had camped overnight near the palace perimeter had started leaving before the Republican Guard's deadline.


The commander of the Guard, which has deployed tanks and armored troop carriers to help police pacify the area, said the intention was to separate the adversaries, not to repress them.


"The armed forces, and at the forefront of them the Republican Guard, will not be used as a tool to oppress the demonstrators," General Mohamed Zaki told the state news agency.


Mursi himself, silent in the turbulence of the last few days, will address the nation later in the day, state television quoted a presidential adviser as saying.


After opposing crowds fought long into the night, the streets around the palace were much calmer in the morning, apart from the brief period of rock-throwing between the hundreds of Islamists and dozens of opposition partisans still at the scene.


STABILITY AT RISK


Army officers on the spot urged the combatants to back off and stop bloodshed that is further dividing Egypt and imperiling its quest for political stability and economic recovery nearly two years after mass protests overthrew Mubarak.


Officials said 350 people had been wounded, in addition to the seven deaths, underlining the scale of the conflict in the Egyptian capital and other cities, following bitter rows over Mursi's assumption of wide powers on November 22 to help him push through a mostly Islamist-drafted constitution.


Six of the dead were Mursi supporters, the Muslim Brotherhood said. Each side blamed the other for the violence.


The Supreme Guide of the Brotherhood, to which Mursi belonged before he was narrowly elected president in June, appealed for unity. Divisions among Egyptians "only serve the nation's enemies", Mohamed Badie said in a statement.


With at least seven tanks at the palace corners, backed by about 10 armored troop carriers and 20 police trucks, the two sides mostly shouted slogans at each other from a distance.


Mursi's opponents accuse him of seeking to create a new "dictatorship" with his November 22 decree and were further angered when an Islamist-dominated assembly hastily approved a draft constitution due to go to a referendum on December 15.


The president has defended his decree as necessary to prevent courts still full of judges appointed by Mubarak from derailing a constitution vital for Egypt's political transition.


Around the palace, traffic moved through streets strewn with rocks thrown during violence in which petrol bombs and guns were also used. Hundreds of Mursi supporters had remained there over night, many wrapped in blankets and some reading the Koran.


"We came here to support President Mursi and his decisions. He is the elected president of Egypt," said demonstrator Emad Abou Salem, 40. "He has legitimacy and nobody else does."


Opposition protester Ehab Nasser el-Din, 21, his head bandaged after being hit by a rock the day before, decried the Muslim Brotherhood's "grip on the country", which he said would only tighten if the new constitution is passed.


Another protester, Ahmed Abdel-Hakim, 23, accused the Brotherhood of "igniting the country in the name of religion".


WESTERN CONCERN


The United States, worried about the stability of an Arab state which has a peace deal with Israel and which receives $1.3 billion in U.S. military aid, has urged dialogue. Britain also called for restraint and an "inclusive" political process.


Vice President Mahmoud Mekky proposed "personal ideas" for a negotiated way out on Wednesday, saying amendments to disputed articles in the constitution could be agreed with the opposition. A written agreement could then go to parliament, to be elected after this month's referendum on the constitution.


"There must be consensus," he told a news conference in the presidential palace as fighting raged outside on Wednesday. But the opposition stuck by its demand for Mursi to cancel the November 22 decree and postpone the referendum before any dialogue.


But Mursi has shown no sign of buckling under pressure from protesters, confident that the Islamists, who have dominated both elections since Mubarak was overthrown, can win the referendum and the parliamentary election to follow.


As well as relying on his Brotherhood power base, Mursi may also draw on a popular yearning for stability and economic revival after almost two years of political turmoil.


The Egyptian pound plunged 4 percent on Thursday to its lowest level in eight years, after previously firming on hopes that a $4.8 billion IMF loan would stabilize the economy. The Egyptian stock market fell 4.4 percent after it opened.


(Additional reporting by Tom Perry and Marwa Awad; Writing by Alistair Lyon; Editing by Giles Elgood)



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