Fiscal Cliff: Can Savings Be Found Without Sacrifice?

How does one come up with $4 trillion in revenue and spending cuts?

That's the question members of Congress, the Obama administration and fiscal experts around the country are grappling with as "fiscal cliff" talks continue to stall.

The fiscal cliff is a combination of the soon-to-expire Bush tax cuts coupled with a series of deep budgetary cuts to defense and domestic programs- the ultimate goal of which is to help stabilize the deficit going forward. While there is no exact amount of savings and revenue that would stabilize the country's debt- the number varies somewhat depending on who you ask- the generally agreed upon range is around $4 trillion.

Republicans and Democrats are drawing lines in the ideological sand. Democrats want to let the Bush tax cuts expire for the highest income earners, effectively raising tax rates on the top 2 percent of earners, which Republicans oppose. Republicans want to look at entitlement reforms- Medicare, Medicaid, Social Security, which Democrats oppose. The seemingly staunch stands beg the question--is there any way to reach a deal that would start to generate close to $4 trillion that does not involve raising taxes or reforming entitlement programs?

It's fiscally possible, but it's inconvenient and unlikely.

There are a series of trims that the government could make to the budget that would save a few billion here and there. Ideas that have been suggested include doubling the airline fee for a non-stop flight from $2.50 to $5, reforming our immigration detention programs, and prison reform.

But those ideas don't generate a great deal of savings in and of themselves. The airline fee increasing for example, it's estimated that raising the non-stop flight fee to $5 would only generate an additional $1 billion a year--$10 billion over the course of 10 years.

Prison reform is another avenue of savings. A study from the Vera Institute of Justice released in January, 2012 showed that in the fiscal year of 2010 the total cost for taxpayers of the nation's federal prisons was $39 billion--which was a little more than $5 billion more than the states' combined corrections budgets that year. The cost of an inmate per taxpayer on average was $31,286.

Reforming the system could trim that cost, but it's a complicated endeavor that lacks a single, or even simple handful of solutions, and at the end of the day wouldn't generate the hundreds of billions of dollars in savings needed to begin approaching the trillions in savings and revenue the government is looking for.

Those big savings, experts point out, are found in entitlements and taxes.

"The high-end Bush tax cuts generate a trillion dollars over 10 years. That's a quarter of the task of stabilizing the debt...That's achievable," said Chuck Marre, director of Federal Tax Policy at the Center on Budget and Policy Priorities. "If they just pass the tax cuts for 98 percent of the people only, by default that (revenue) happens and that's significant. Then you need to figure out where does the rest of the money come from?"

And a significant area where that money comes from, experts suggest, is entitlement spending.

"I'm sure there are some small programs that could be eliminated or curtailed but it would be a drop in the ocean of spending represented by entitlements," said Isabel Sawhill, a senior fellow at the Brookings Institution.

Social Security, Medicaid and Medicare, are categorized as mandatory spending in the government's fiscal budget. In the 2010 fiscal year 55 percent of the budget went to mandatory spending. Within that 55 percent, Social Security, Medicare and Medicaid made up a total of 71 percent combined, according to figures from the Center on Budget and Policy Priorities.

It's these avenues that will likely be the quickest and least complicated means of generating the savings necessary to stabilize the debt. Of course, the irony is, these avenues are also the most politically sacred, making a simple and painless fix to the problem effectively impossible.

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NATO warns Syria not to use chemical weapons

BEIRUT (Reuters) - NATO told Syrian President Bashar al-Assad on Tuesday that any use of chemical weapons in his fight against encroaching rebel forces would be met by an immediate international response.

The warning from NATO Secretary-General Anders Fogh Rasmussen came as U.S. government sources said Washington had information that Syria was making what could be seen as preparations to use its chemical arsenal.

Syrian forces meanwhile bombarded rebel districts near Damascus in a sustained counter-attack to stem rebel gains around Assad's power base.

Syrian state media said a rebel mortar attack on a school had killed 28 students and a teacher.

International concern over Syria's intentions has been heightened by reports that its chemical weapons have been moved and could be prepared for use.

"The possible use of chemical weapons would be completely unacceptable for the whole international community and if anybody resorts to these terrible weapons I would expect an immediate reaction from the international community," Rasmussen told reporters at the start of a meeting of alliance foreign ministers in Brussels.

The chemical threat made it urgent for the alliance to send Patriot anti-missile missiles to Turkey, Rasmussen said.

The French Foreign Ministry referred to "possible movements on military bases storing chemical weapons in Syria" and said the international community would react if the weapons were used.

U.S. President Barack Obama on Monday told Assad not to use chemical weapons, without saying how the United States might respond. The Foreign Ministry in Damascus said it would never use such weapons against Syrians.

The U.S. has collected what has been described as highly classified intelligence information demonstrating that Syria is making what could be construed as preparations to use elements of its extensive chemical weapons arsenal, two U.S. government sources briefed on the issue said.

One of the sources said that there was no question that the US "Intelligence community" had received information pointing to "preparations" under way in Syria related to chemical weapons. The source declined to specify what kind of preparations had been reported, or how close the intelligence indicated the Syrians were to deploying or even using the weapons.

Western military experts say Syria has four suspected chemical weapons sites, and it can produce chemical weapons agents including mustard gas and sarin, and possibly also VX nerve agent. The CIA has estimated that Syria possesses several hundred liters of chemical weapons and produces hundreds of tonnes of agents annually.

FLIGHTS SUSPENDED

The fighting around Damascus has led foreign airlines to suspend flights and prompted the United Nations and European Union to reduce their presence in the capital, adding to a sense that the fight is closing in.

The army fightback came a day after the Syrian foreign ministry spokesman was reported to have defected in a potentially embarrassing blow to the government.

The Syrian Observatory for Human Rights said 200 people were killed across Syria on Monday, more than 60 of them around Damascus. Assad's forces bombarded districts to the south-east of the capital on Tuesday, near to the international airport, and in the rebel bastion of Daraya to the south-west.

Opposition footage posted on the Internet showed a multiple rocket launcher fire 20 rockets, which activists said was filmed at the Mezze military airport in Damascus.

Reuters could not independently verify the footage due to the government's severe reporting restrictions.

In central Damascus, shielded for many months from the full force of a civil war in which 40,000 people have been killed, one resident reported hearing several loud explosions.

"I have heard four or five thunderous blows. It could be barrel bombs," she said, referring to makeshift bombs which activists say Assad's forces have dropped from helicopters on rebel-dominated areas.

The state news agency said that 28 students and a teacher were killed near the capital when rebels fired a mortar bomb on a school. Rebels have targeted government-held residential districts of the capital.

The mainly Sunni Muslim rebel forces have made advances in recent weeks, seizing military bases, including some close to Damascus, from forces loyal to Assad, who is from Syria's Alawite minority linked to Shi'ite Islam.

Faced with creeping rebel gains across the north and east of the country, and the growing challenge around the capital, Assad has increasingly resorted to air strikes against the insurgents.

A diplomat in the Middle East said Syrian Foreign Ministry spokesman Jihad Makdissi had left the country and defected, while the British-based Observatory said it had information that he flew from Beirut on Monday afternoon heading for London.

In Beirut, a diplomat said Lebanese officials had confirmed that Makdissi spent several days in Beirut before leaving on Monday, but could not confirm his destination.

"We're aware of reports that he has defected and may be coming to the UK. We're seeking clarification," a Foreign Office spokeswoman in London said.

Makdissi was the public face to the outside world of Assad's government as it battled the 20-month-old uprising. But he had barely appeared in public for several weeks before Monday's report of his defection.

He had little influence in a system largely run by the security apparatus and the military. But Assad's opponents will see the loss of such a high profile figure, if confirmed, as further evidence of a system crumbling from within.

ESCALATED VIOLENCE

The United Nations and European Union both said they were reducing their presence in Syria in response to the escalated violence around the capital.

A spokesman for U.N. humanitarian operations said the move would not stop aid deliveries to areas which remained accessible to relief convoys.

"U.N.-funded aid supplies delivered through SARC (Syrian Arab Red Crescent) and other charities are still moving daily where the roads are open," Jens Laerke told Reuters in Geneva.

"We have not suspended our operation, we are reducing the non-essential international staff."

Three remaining international staff at the European Union delegation, who stayed on in Damascus after the departure of most Western envoys, crossed the border into Lebanon on Tuesday after pulling out of the Syrian capital.

(Additional reporting by David Brunnstrom in Brussels, Khaled Yacoub Oweis in Cairo, Erika Solomon, Oliver Holmes and Ayat Basma in Beirut, Mark Hosenball, Mohammed Abbas and David Cutler in London, and Stephanie Nebehay in Geneva)

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Foo Mee Har leaves Standard Chartered senior banker post

SINGAPORE: Member of Parliament for West Coast GRC Foo Mee Har has resigned as Standard Chartered Bank's Global Head for Priority Banking and International Banking to pursue other interests.

In a Facebook posting on Tuesday, Ms Foo added that she was pleased to take on a non-executive role in the Bank and to continue contributing in such a capacity in Asia.

She added: "I am excited about this new direction in my life. Amongst other things, I am looking forward to spending time on a number of initiatives in the pipeline for the Ayer Rajah constituency." - TODAY

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SP, BSP slam govt on FDI policy, vague on voting

NEW DELHI: The much-talked about debate on FDI in retail in the Lok Sabha today saw SP and BSP joining the opposition in slamming the government over it but remaining ambivalent on voting tomorrow even as UPA ally DMK vowed not to rock the boat despite its opposition to the move.

SP chief Mulayam Singh Yadav cautioned the Congress that the FDI decision would hurt its poll prospects and benefit the BJP, as he and BSP leader Dara Singh Chauhan counselled the government not to rush with its implementation.

Both parties, whose support is crucial for UPA, termed as "fraud" the government's contention that the FDI decision would lead to job creation and saw it as a "conspiracy" to finish off the 25 crore small traders in the country.

Yadav and Chauhan went to the extent of invoking Mahatma Gandhi in expressing opposition to FDI, with the SP chief telling Congress President Sonia Gandhi that she should give "weightage" at least to her surname and defer the move.

Chauhan said his party will disclose tomorrow the way it will vote. "We are seriously thinking about whether to stand with the communal forces or not," he said.

Yadav too was silent on the voting issue even as he told the government, "The role of the Opposition is to give suggestions and we are doing that. We are suggesting that you give up the FDI decision," he said.

DMK leader T K S Elangovan said his party was strongly against FDI but "we will still not vote against you.... we will not let you down. We will not join the Opposition, we will not join the BJP...We will watch you and correct you."

Slamming the government, Leader of the Opposition Sushma Swaraj demanded withdrawal of the FDI decision in national interest fearing it would render retailers jobless, impoverish farmers and hurt consumers.

On the government's behalf, telecom minister Kapil Sibal accused the opposition of trying to score political points by objecting to FDI in retail and asserted that the decision would benefit farmers, small scale industries, youth and consumers in the country.

Sibal asserted that the FDI decision would benefit farmers, small scale industries, youth and consumers in the country and charged BJP and Left parties with ignoring "ground reality" and helping commission agents.

T K S Elangovan (DMK), key constituent of the UPA, said it was with the government only because "it is the need of the hour to save the fiscal condition of the states.

"So, we do not want to let you down. Secondly, we do not want to join the Opposition, we do not want to join the BJP. We are not neutral. We are against the FDI in multi-brand retail," he said.

Elangovan said the DMK does not want to oppose the government or vote against it because "we know that only the hand is injured and we do not want to put you for a whole body scan."

"So, we have time. We are with you. We will watch you and we will correct you as and when necessary because we have to face the people. One or two things may be not in the interest of the people for which we do not want to let you down. While registering my strong opposition to the FDI in multi-brand retail, I also support the government," he said.

Earlier, Yadav rejected government's contention that FDI would lead to growth and said if the Western countries like the US had not benefited and seen job creation how could it be good for India.

In this context, he referred to a provision in the FDI policy to implement it only in cities having a population of 10 lakhs or more. "If you are really convinced that it is beneficial then why are you not implementing it in the entire country," Yadav said.

He asked the government to do a rethink and not force suicides by farmers who depend only on agriculture.

Appealing to Sonia Gandhi to defer it, Yadav said if we realise later that it is beneficial we will support it.

He told Gandhi that polls were not far away and "clever" BJP and RSS will exploit this issue through their wide base in villages.

"You will not benefit electorally from it. They (BJP) will come to power. We will not come to power but we will give support to you or take support from you," he said.

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Tapping citizen-scientists for a novel gut check

WASHINGTON (AP) — The bacterial zoo inside your gut could look very different if you're a vegetarian or an Atkins dieter, a couch potato or an athlete, fat or thin.

Now for a fee — $69 and up — and a stool sample, the curious can find out just what's living in their intestines and take part in one of the hottest new fields in science.

Wait a minute: How many average Joes really want to pay for the privilege of mailing such, er, intimate samples to scientists?

A lot, hope the researchers running two novel citizen-science projects.

One, the American Gut Project, aims to enroll 10,000 people — and a bunch of their dogs and cats too — from around the country. The other, uBiome, separately aims to enroll nearly 2,000 people from anywhere in the world.

"We're finally enabling people to realize the power and value of bacteria in our lives," said microbiologist Jack Gilbert of the University of Chicago and Argonne National Laboratory. He's one of a team of well-known scientists involved with the American Gut Project.

Don't be squeamish: Yes, we share our bodies with trillions of microbes, living communities called microbiomes. Many of the bugs, especially those in the intestinal tract, play indispensable roles in keeping us healthy, from good digestion to a robust immune system.

But which combinations of bacteria seem to keep us healthy? Which ones might encourage problems like obesity, diabetes or irritable bowel syndrome?

And do diet and lifestyle affect those microbes in ways that we might control someday?

Answering those questions will require studying vast numbers of people. Getting started with a grassroots movement makes sense, said National Institutes of Health microbiologist Lita Proctor, who isn't involved with the new projects but is watching closely.

After all, there was much interest in the taxpayer-funded Human Microbiome Project, which last summer provided the first glimpse of what makes up a healthy bacterial community in a few hundred volunteers.

Proctor, who coordinated that project, had worried "there would be a real ick factor. That has not been the case," she said. Many people "want to engage in improving their health."

Scott Jackisch, a computer consultant in Oakland, Calif., ran across American Gut while exploring the science behind different diets, and signed up last week. He's read with fascination earlier microbiome research: "Most of the genetic matter in what we consider ourselves is not human, and that's crazy. I wanted to learn about that."

Testing a single stool sample costs $99 in that project, but he picked a three-sample deal for $260 to compare his own bacterial makeup after eating various foods.

"I want to be extra, extra well," said Jackisch, 42. Differing gut microbes may be the reason "there's no one magic bullet of diet that people can eat and be healthy."

It's clear that people's gut bacteria can change over time. What this new research could accomplish is a first look at how different diets may play a role, said American Gut lead researcher Rob Knight of the University of Colorado, Boulder.

One challenge is making sure participants don't expect that a map of their gut bacteria can predict their future health, or suggest lifestyle changes, anytime soon.

"I understand I'm not going to be able to say, 'Oh, my gosh, I'll be susceptible to this,'" said Bradley Heinz, 26, a financial consultant in San Francisco. He is paying uBiome $119 to analyze both his gut and mouth microbiomes; just the gut is $69.

"The more people that participate, the more information comes out and the more that everybody benefits," he added.

Participants can sign up for either project via the social fundraising site Indiegogo.com over the next month. They also can send scrapings from the skin, mouth and other sites, to analyze that bacteria. Sign up enough family members or body sites, or be tracked over time, and the price can rise into the thousands. American Gut researchers plan some free testing for those who can't afford the fees, to try to increase the experiment's diversity.

Don't forget the pets: "We sleep with them, play with them, they often eat our food," said American Gut co-founder Jeff Leach, an anthropologist. What bacteria we have in common is the next logical question.

Already, American Gut researchers are preparing to compare what they find in the typical U.S. gut with a few hundred people in rural Namibia, who eat what's described as hunter-gatherer fare. Also, Leach will spend three months living in Namibia next year, and is storing his own stool samples for before-and-after comparison.

But diet isn't the only factor. Your bacterial makeup starts at birth: Babies absorb different microbes when they're born vaginally than when they're born by C-section, a possible explanation for why cesareans raise the risk for certain infections. Taking antibiotics, especially in early childhood, can alter this teeming inner world, and it's not clear if there are lasting consequences.

Then there's your environment, such as the infections spread in hospitals. In February, a new University of Chicago hospital building opens and Gilbert will test the surfaces, the patients and their health workers to see how quickly bad bugs can move in and identify which bacteria are protective.

Whatever the findings, all the research marks "a huge teachable moment" about how we interact with microbes, Leach said.

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EDITOR'S NOTE — Lauran Neergaard covers health and medical issues for The Associated Press in Washington.

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Online:

www.indiegogo.com/americangut

www.indiegogo.com/ubiome

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Insiders Reveal 2012 Election Secrets

Pete Souza/White House

The 2012 election cycle came full circle last week when representatives from the Obama and Romney campaigns, as well as top advisers to many of the GOP primary candidates and several influential outside groups, gathered at the Harvard Kennedy School of Government for a 2012 debrief — finally answering some of the lingering questions about the race.

On neutral ground in Cambridge, Mass., fierce rivals (think Romney campaign manager Matt Rhoades and strategist Stuart Stevens and Obama campaign manager Jim Messina and strategist David Axelrod) met for the first time since the election — and many for the first time ever.

The conference, organized by Harvard’s Institute of Politics, featured a who’s who of political bold-faced names from campaign 2012, including senior campaign aides like Romney political director Rich Beeson and pollster Neil Newhouse, Obama deputy campaign manager Stephanie Cutter and digital director Teddy Goff, Rick Santorum adviser John Brabender, former Rick Perry campaign operatives Rob Johnson and Dave Carney and even Mark Block, who ran Herman Cain’s short-lived but much-talked-about presidential bid.

Representatives from the outside groups that had so much influence — and spent so much money — on the election were also on hand, including Bill Burton, senior strategist for the pro-Obama super PAC, Priorities USA Action; Steven Law, head of the pro-Republican group American Crossroads; and Tim Phillips, president of the conservative Americans for Prosperity.

Dozens of campaign 2012 veterans and journalists were on hand for the sessions, which covered the GOP primary, the general election, campaign strategy, the debates, conventions and the emerging power of the super PACS.

Here are some of the highlights from the conference:

Romney’s Campaign Concedes Immigration Position in Primary Was a Mistake

Mitt Romney’s decision to take a hard-line stance on immigration during the GOP primary was considered a big reason for his paltry 27 percent showing among Latino voters. But, the conventional wisdom has suggested that Romney couldn’t have won the primary without drawing a strong contrast with Texas Gov. Rick Perry on this hot-button issue.

Romney campaign manager Matt Rhodes, however, says that his candidate could have won the primary without attacking Perry’s support for in-state tuition for illegal immigrants.  When asked by panel moderator Jonathan Martin of Politico whether he “regret[s] trying to outflank Perry on the right on immigration,” Rhoades took a long pause, and then shifted the conversation to Perry’s controversial statements about Social Security. Romney had attacked the Texas governor for calling the popular entitlement program a “Ponzi scheme” and a “failure.”

“In retrospect,” Rhoades said. “I believe we probably could have just beaten Perry with the Social Security hit.”

So while Rhoades never said he wished that Romney had never uttered the words, “self-deportation” he essentially conceded that he regrets the immigration position the governor took in the primary.

The Obama Campaign Only Fully Committed to Florida in Mid-September

If there was one state that the Romney campaign felt confident they were going to win it was Florida. And, until mid-September, the Obama campaign wasn’t convinced that they were going to contest the state. That changed in the aftermath of the strong convention in Charlotte, however, and the Obama campaign decided that they were going to go “full out” to win there.

Obama campaign strategist David Axelrod:

“One of the things that we had discussed internally was the state of Florida and how we were going to treat Florida. We had made a decision that we were going to wait until mid September and after the conventions to see where we were in Florida before we fully committed. We were in, we had invested a lot, but we hadn’t been in the Miami media market. When we emerged from conventions not only had we gotten a little bump, but we saw Florida remained very competitive and made the decision to go full out in Florida.”

Team Romney Never Read Clint Eastwood Speech

Romney strategist and convention director Russ Schrieffer was asked by panel moderator Ron Brownstein of National Journal if anyone actually read a copy of Eastwood’s speech. The answer: not so much.

Russ Schrieffer: “I said [to Eastwood] are you going to do what we talked about, are you going to talk about what you talked about at these fundraisers. And he looked at me and said.. ‘Yep.’ ”

Laughter followed Schrieffer’s comments to which he replied:

“It’s Clint Eastwood, you argue with him.”

Republicans Are Worried (And Rightly So) About the Technology Gap With Democrats: 

Jon Huntsman’s campaign manager Matt David noted that “one area we should freak out about is technology. The GOP is far behind there.”

The Obama campaign used social media as a means to an end — using technology as a way to recruit, persuade, target and turn out voters.  Obama’s digital campaign guru Teddy Goff pointed to the power of Facebook in helping to find a previously unreachable group of potential voters: the friends of those who were already voting for the President.

In 2008, said Goff, they found that “99 percent of our email list voted.” As such, Goff said, “We entered into this election, with an understanding that anyone we were talking to directly, the vast majority were voting for us. So the question was … how can we serve them with stuff that will make them go out and get their friends.” And, Obama’s Facebook fans were a great place to start. Obama’s 33 million Facebook fans globally are friends with 98 percent of the U.S. Facebook population, Goff said.

Facebook also helped the campaign track down their coveted 18-to-29-year-old cohort. Goff explained that they were unable to reach half of their 18-to-29 GOTV targets by phone because they didn’t have a phone number for them. But, he said, they could reach 85 percent of that group via a Friend of Barack Obama on Facebook. “We had an ability to reach those people who simply otherwise couldn’t be reached,” Goff said.

Was the Romney High Command Really and Truly Shocked on Election Night? 

Neil Newhouse, Romney pollster:

“Here’s what we saw in the data: you have to give credit to the Obama campaign for undercutting it. We saw in the last two weeks, an intensity advantage, a campaign interest advantage, an enthusiasm advantage for Republicans and Mitt Romney. … Just the same as we saw four years ago on behalf of Barack Obama. We thought it would tilt the partisan make-up of the electorate a couple points in our direction.

“We weren’t surprised by racial composition; we were surprised by the partisan composition. … The real hidden story here on our side, the number of white men who didn’t vote in this election compared to four years ago was extraordinary. And these white men were replaced by white women. We were taking a group we won by 27 points and replacing them with a group we won by 12-14 points.”

Perry Should Have Waited Until Late Fall, Not Summer, to Jump In:

Perry strategist Dave Carney said the biggest tactical mistake made by Perry was that “we should have started years ago.” Perry, as governor in a state with a part-time legislature, “had a lot of time on his hands” — he should have used that time, and his role as RGA chair, to meet donors and travel the country before 2011. Once Perry decided to get in, however, Carney argues the Perry should have waited until mid-October or November to get into the race. That extra few months, said Carney, “would have given us more time to be prepared and do the groundwork that was necessary on the issues.”

What Role Did Karl Rove Play With Republican Outside Groups Like American Crossroads, Which He Co-founded?

Steven Law, president and CEO of American Crossroads and president CrossroadsGPS:

“Karl … recognized it was really important to not simply have an organization exist in a particular cycle for a tactical use but to … start to build enduring institutional strength on the right the way that we saw the unions providing that for the Democrats. … And then there were certain other parts that I think Karl really gets credit for. The first is encouraging us to reach out to other center-right groups and to try to start to collaborate where we were legally permitted to do so to share information and encourage people to pull the oars in the same direction. On the fundraising side both he and Ed [Gillespie] and then later on Haley Barbour were all tremendously instrumental in harvesting their Rolodexes and relationships. Karl is a guy that’s got tremendously good ideas, and again, not so much on the tactical side but more kind of broad strategic moments and was a tremendously useful and valuable source of ideas along the way.”

Bill Burton, senior adviser, Priorities USA Action:

“He also helped us raise money. I probably e-mailed out every one of his columns to our donors — our high-dollar list — to point out what they were saying on the Republican side and how confident Rove was. … When he would go on TV bursting with confidence about Romney winning, that little click went around every single time. Karl Rove is an enduring figure for both sides.”

After Rove’s Appearance on Fox News on Election Night, Is He Discredited Within the Republican Party?

Steven Law:

“Absolutely not. We all get our turn in the barrel.”

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Israel faces European backlash over settlement plan

JERUSALEM (Reuters) - Israel faced concerted criticism from Europe on Monday over Prime Minister Benjamin Netanyahu's decision to expand settlement building after the United Nations' de facto recognition of Palestinian statehood.

Britain, France and Sweden summoned the Israeli ambassadors in their respective capitals to hear deep disapproval of the plan to erect 3,000 more homes in the occupied West Bank and East Jerusalem.

Ahead of a Netanyahu visit this week, Germany, considered Israel's closest ally in Europe, urged it to refrain from expanding settlements, and Russia said it viewed the Israeli moves with serious concern.

Angered by the U.N. General Assembly's upgrading on Thursday of the Palestinians' status in the world body from "observer entity" to "non-member state", Israel said the next day it would build the new dwellings for settlers.

Such projects in the past, on land Israel captured in a 1967 war and which Palestinians seek for a future state, have routinely drawn almost pro forma world condemnation.

But in a dramatic shift that Netanyahu would have certainly realized would raise the alarm among Palestinians and in world capitals, his pro-settler government also ordered "preliminary zoning and planning work" for thousands of housing units in areas including the so-called "E1" zone east of Jerusalem.

Such construction in the barren hills of E1 - still on the drawing board and never put into motion in the face of opposition from its main ally, the United States - could bisect the West Bank, cut off Palestinians from Jerusalem and further dim their hopes for a contiguous state.

The settlement plan, U.N. Secretary-General Ban Ki-moon said, would deal "an almost fatal blow" to a two-state solution to the Israeli-Palestinian conflict.

Britain made clear it would not support strong Israeli retaliation over the U.N. vote, which Palestinians sought after peace talks collapsed in 2010 in a dispute over settlement building.

"We deplore the recent Israeli decision to build 3,000 new housing units and unfreeze development in the E1 block," a Foreign Office spokesman said. "We have called on the Israeli government to reverse the decision."

But a spokesman for British Prime Minister David Cameron played down talk of recalling Britain's ambassador in Tel Aviv.

"We are not proposing to do anything further at this stage," the spokesman said. "We are continuing to have conversations with the Israeli government and others."

France expressed "serious concerns" to the Israeli ambassador, reminding him that settlement building in occupied territories was illegal and an "obstacle" to reviving peace talks with the Palestinians.

A French Foreign Ministry official, responding to reports Paris might bring its Tel Aviv envoy home, said: "There are other ways in which we can express our disapproval."

RETALIATION

Israeli Finance Minister Yuval Steinitz said Israel could not have remained indifferent to the Palestinians' unilateral move at the United Nations.

In Europe only the Czech Republic voted against the resolution while many countries, including France, backed it. Netanyahu also plans to visit Prague this week to express his thanks.

"I want to tell you that those same Europeans and Americans who are now telling us 'naughty, naughty over our response, understand full-well that we have to respond, and they themselves warned the Palestinian Authority," Steinitz told Army Radio.

Palestinian chief negotiator Saeb Erekat said building in E1 "destroys the two-state solution, (establishing) East Jerusalem as the capital of Palestine and practically ends the peace process and any opportunity to talk about negotiations in the future".

Sami Abu Zuhri, spokesman for the Hamas Islamist movement that governs the Gaza Strip, said the settlement plans were "an insult to the international community, which should bear responsibility for Israeli violations and attacks on Palestinians".

Only three weeks ago, Netanyahu won strong European and U.S. support for an offensive in the Hamas Islamist-run Gaza Strip, which Israel said was aimed at curbing cross-border rocket fire.

Favored by opinion polls to win a January 22 national election, he brushed off world condemnation of his latest settlement plans and complaints from critics at home that he is deepening Israel's diplomatic isolation.

He told his cabinet on Sunday that his government "will carry on building in Jerusalem and in all the places on the map of Israel's strategic interests".

But while his housing minister has said the government would soon invite bids from contractors to build 1,000 homes for Israelis in East Jerusalem and more than 1,000 in West Bank settlement blocs, the E1 plan was still in its planning stages.

"No one will build until it is clear what will be done there," the minister, Ariel Attias, said on Sunday.

Israel froze much of its activities in E1 under pressure from former U.S. President George W. Bush and the area has been under the scrutiny of his successor Barack Obama.

Most world powers consider Israel's settlements to be illegal. Israel cites historical and Biblical links to the West Bank and Jerusalem and regards all of the holy city as its capital, a claim that is not recognized internationally.

Approximately 500,000 Israelis and 2.5 million Palestinians live in the West Bank and East Jerusalem.

(Additional reporting by Crispian Balmer, Dan Williams, Nidal al-Mughrabi in Gaza, Jihan Abdalla in Ramallah, Sreve Gutterman in Moscow, Gareth Jones in Berlin, John Irish in Paris and Tim Castle in London; Writing by Jeffrey Heller; Editing by Giles Elgood)

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US manufacturing shrinks in November

WASHINGTON: US manufacturing activity contracted in November, with businesses blaming the slow global economy and uncertainty from the fiscal cliff battle in Washington, the ISM monthly survey showed on Monday.

Businesses also cited the impact of superstorm Sandy, which shut down much of the Northeast economy for several days at the beginning of the month.

The Institute for Supply Management's monthly manufacturing sector index fell to 49.5, in contraction territory below the 50 break-even level, from a positive 51.7 in October, snapping two straight monthly gains.

It was the lowest level on the index since July 2009.

Only six of 18 manufacturing sectors showed growth, with some survey respondents citing a general slowdown since midyear and others blaming the storm which blasted ashore in heavily industrial New Jersey at the end of October, shutting down New York and other major cities and cutting power for millions.

The sub-index for new orders fell 3.9 points to 50.3, and the employment index fell 3.7 points to 48.4. Inventories also contracted while price growth slowed, all showing the manufacturing sector as sluggish in the month.

"Global economic uncertainty still seems to be sticking around which is not necessarily making things worse, but it is also not making things better from a demand standpoint," said one respondent from the chemicals sector.

A respondent in the fabricated metal products industry called the looming fiscal cliff tax hikes and budget cuts that take effect in January unless politicians agree a budget compromise "the big worry right now."

"We will not look toward any type of expansion until this is addressed."

- AFP/de

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Court denies bail to Zee journalists

NEW DELHI: A Delhi court on Monday dismissed the bail plea of two Zee News journalists arrested on an extortion complaint filed by Congress MP Naveen Jindal's company Jindal Power and Steel Ltd.

Metropolitan Magistrate Rajinder Singh dismissed the bail plea of the duo, who were sent to 14 days' judicial custody November 30.

Sudhir Chaudhary, head of Zee News, and Samir Ahluwalia, head of Zee Business, were arrested here November 27 on charges of attempting to extort Rs 100 crore from Jindal Power and Steel Limited in exchange for not filing news reports linking the firm to the allegedly irregular coal block allocation.

The Jindal Group filed an extortion complaint against them.

Police booked both the journalists under Sections 384 (extortion), 120(b) (criminal conspiracy) and 511 (punishment for attempting to commit offences punishable with imprisonment for life or other imprisonment) of the Indian Penal Code (IPC). Before arresting Chaudhary and Ahluwalia Tuesday, police also charged them under Section 420 (cheating).

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Asperger's dropped from revised diagnosis manual

CHICAGO (AP) — The now familiar term "Asperger's disorder" is being dropped. And abnormally bad and frequent temper tantrums will be given a scientific-sounding diagnosis called DMDD. But "dyslexia" and other learning disorders remain.

The revisions come in the first major rewrite in nearly 20 years of the diagnostic guide used by the nation's psychiatrists. Changes were approved Saturday.

Full details of all the revisions will come next May when the American Psychiatric Association's new diagnostic manual is published, but the impact will be huge, affecting millions of children and adults worldwide. The manual also is important for the insurance industry in deciding what treatment to pay for, and it helps schools decide how to allot special education.

This diagnostic guide "defines what constellations of symptoms" doctors recognize as mental disorders, said Dr. Mark Olfson, a Columbia University psychiatry professor. More important, he said, it "shapes who will receive what treatment. Even seemingly subtle changes to the criteria can have substantial effects on patterns of care."

Olfson was not involved in the revision process. The changes were approved Saturday in suburban Washington, D.C., by the psychiatric association's board of trustees.

The aim is not to expand the number of people diagnosed with mental illness, but to ensure that affected children and adults are more accurately diagnosed so they can get the most appropriate treatment, said Dr. David Kupfer. He chaired the task force in charge of revising the manual and is a psychiatry professor at the University of Pittsburgh.

One of the most hotly argued changes was how to define the various ranges of autism. Some advocates opposed the idea of dropping the specific diagnosis for Asperger's disorder. People with that disorder often have high intelligence and vast knowledge on narrow subjects but lack social skills. Some who have the condition embrace their quirkiness and vow to continue to use the label.

And some Asperger's families opposed any change, fearing their kids would lose a diagnosis and no longer be eligible for special services.

But the revision will not affect their education services, experts say.

The new manual adds the term "autism spectrum disorder," which already is used by many experts in the field. Asperger's disorder will be dropped and incorporated under that umbrella diagnosis. The new category will include kids with severe autism, who often don't talk or interact, as well as those with milder forms.

Kelli Gibson of Battle Creek, Mich., who has four sons with various forms of autism, said Saturday she welcomes the change. Her boys all had different labels in the old diagnostic manual, including a 14-year-old with Asperger's.

"To give it separate names never made sense to me," Gibson said. "To me, my children all had autism."

Three of her boys receive special education services in public school; the fourth is enrolled in a school for disabled children. The new autism diagnosis won't affect those services, Gibson said. She also has a 3-year-old daughter without autism.

People with dyslexia also were closely watching for the new updated doctors' guide. Many with the reading disorder did not want their diagnosis to be dropped. And it won't be. Instead, the new manual will have a broader learning disorder category to cover several conditions including dyslexia, which causes difficulty understanding letters and recognizing written words.

The trustees on Saturday made the final decision on what proposals made the cut; recommendations came from experts in several work groups assigned to evaluate different mental illnesses.

The revised guidebook "represents a significant step forward for the field. It will improve our ability to accurately diagnose psychiatric disorders," Dr. David Fassler, the group's treasurer and a University of Vermont psychiatry professor, said after the vote.

The shorthand name for the new edition, the organization's fifth revision of the Diagnostic and Statistical Manual, is DSM-5. Group leaders said specifics won't be disclosed until the manual is published but they confirmed some changes. A 2000 edition of the manual made minor changes but the last major edition was published in 1994.

Olfson said the manual "seeks to capture the current state of knowledge of psychiatric disorders. Since 2000 ... there have been important advances in our understanding of the nature of psychiatric disorders."

Catherine Lord, an autism expert at Weill Cornell Medical College in New York who was on the psychiatric group's autism task force, said anyone who met criteria for Asperger's in the old manual would be included in the new diagnosis.

One reason for the change is that some states and school systems don't provide services for children and adults with Asperger's, or provide fewer services than those given an autism diagnosis, she said.

Autism researcher Geraldine Dawson, chief science officer for the advocacy group Autism Speaks, said small studies have suggested the new criteria will be effective. But she said it will be crucial to monitor so that children don't lose services.

Other changes include:

—A new diagnosis for severe recurrent temper tantrums — disruptive mood dysregulation disorder. Critics say it will medicalize kids' who have normal tantrums. Supporters say it will address concerns about too many kids being misdiagnosed with bipolar disorder and treated with powerful psychiatric drugs. Bipolar disorder involves sharp mood swings and affected children are sometimes very irritable or have explosive tantrums.

—Eliminating the term "gender identity disorder." It has been used for children or adults who strongly believe that they were born the wrong gender. But many activists believe the condition isn't a disorder and say calling it one is stigmatizing. The term would be replaced with "gender dysphoria," which means emotional distress over one's gender. Supporters equated the change with removing homosexuality as a mental illness in the diagnostic manual, which happened decades ago.

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AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner .

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