Automakers End 2012 With Sales at 5-Year High

DETROIT — Automakers on Thursday reported their strongest sales year since 2007, posting solid December results in the United States and promising more growth in 2013.

Sales of new cars and trucks increased 9 percent in December, a gain that put total sales for 2012 at about 14.5 million vehicles — the industry’s best performance in five years, according to the research firm Autodata.

That represents a 13 percent increase over 2011, and raises expectations that demand will continue to rise as more Americans need to replace their aging vehicles with new models.

Auto executives forecast that the United States market would grow to at least 15.5 million this year and possibly higher, if housing starts and other economic factors continue to improve.

“For the industry, 2012 was mission accomplished,” said Jesse Toprak, an analyst with the auto research site TrueCar.com. “Companies are hitting their sales goals, and they are doing it with fewer incentives.”

Much of the growth has been concentrated in the comebacks of Toyota and Honda from supply chain disruptions caused by the earthquake and tsunami in Japan two years ago. And while automakers like Chrysler and Volkswagen posted hefty increases throughout the year, the two biggest American companies, General Motors and Ford Motor, lagged the overall gains.

December was a microcosm of the year’s results, as G.M. and Ford on Thursday reported smaller sales increases than those of their chief domestic, European and Asian rivals. G.M. said sales in December increased 4.9 percent, compared with the same month a year ago, primarily because of new products like the Cadillac ATS sedan and higher incentives on its Chevrolet Silverado and GMC Sierra pickups.

The company had been losing ground in the high-profit pickup segment until it added discounts to the Silverado, which posted a 6.1 percent sales increase in December, and the Sierra, which was up 13.4 percent. For the year, G.M. sold 2.59 million vehicles, an increase of 3.7 percent from 2011.

G.M.’s head of United States sales, Kurt McNeil, said the company expected significant growth to about 15.5 million vehicles industrywide this year. He noted that Tuesday’s pact on the fiscal crisis in Washington removed potential concerns for consumers shopping for new vehicles.

“We are especially pleased that the politicians on both sides of the aisle in Washington were able to compromise,” Mr. McNeil said in a conference call with analysts on Thursday. “The short-term crisis has passed.”

Ford reported a slight sales increase of 1.6 percent in December, as safety recalls for its new Escape S.U.V. and Fusion sedan depressed its overall results. Ford said that sales of the Fusion dropped 10.8 percent during the month, and Escape sales slid 21.3 percent. The company has been plagued with multiple recalls on engines and other parts on the new vehicles, which are usually among its strongest sellers.

The drop-off was mitigated by strong results for Ford’s two smallest cars, the Focus, which increased in sales by 58.3 percent, and the Fiesta, which was up by 52.8 percent.

For all of 2012, Ford’s United States sales increased 4.7 percent, to 2.24 million vehicles. Ken Czubay, head of Ford’s United States sales and marketing, said the company’s small-car sales were its best in more than a decade.

Ford predicted that industry sales could possibly reach 16 million vehicles in 2013, as more consumers trade in older models and buy new, more fuel-efficient ones. That peak hasn’t been reached since sales of 16.1 million in 2007.

Chrysler, the smallest of the Detroit companies, was the star performer in December, with a 10.4 percent increase.

The company’s new compact car, the Dodge Dart, gained traction with sales of 6,100 — its highest monthly total since it was introduced last summer. Much of Chrysler’s lineup — ranging from Jeep S.U.V.’s to the tiny Fiat 500 — posted sales records for the month of December. For the year, Chrysler said it sold 1.65 million vehicles, a 20.6 percent increase from 2011.

Toyota reported a 9 percent sales gain in December, which was one of the weaker months in its turnaround in 2012. The company said it sold 2.08 million vehicles in the United States for the full year, which was a 26.6 percent gain over 2011. Its three top-selling vehicles — the Corolla compact car, Camry sedan and Prius gas-electric hybrid — accounted for nearly half of its overall sales for the year.

Analysts said Toyota appeared poised to outperform the overall market this year as well.

“Fresh products like the all-new RAV4 S.U.V. should help keep the momentum going,” said Jessica Caldwell, an analyst with the car research site Edmunds.com.

Honda ended the year on a high note, reporting a 26.2 percent jump in sales in December in the United States. Its bellwether cars, the Accord and Civic, led the way, each with increases of more than 60 percent. For the year, Honda said it sold 1.14 million vehicles, a 24 percent gain from 2011.

Other automakers had mixed results. Nissan said its December sales dropped 1.6 percent, but the company ended 2012 with a 9.5 percent gain for the year.

Volkswagen closed the year with another banner month. The German automaker reported a 29.9 percent gain for December and a 30.6 percent increase for the full year.

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Bieber urges crackdown on paparazzi after photographer's death

Justin Bieber and his collection of exotic cars have been tantalizing targets for celebrity photographers ever since the young singer got his driver's license.

A video captured the paparazzi chasing Bieber through Westside traffic in November. When Bieber's white Ferrari stops at an intersection, the video shows the singer turning to one of the photographers and asking: "How do your parents feel about what you do?"

A few months earlier, he was at the wheel of his Fisker sports car when a California Highway Patrol officer pulled him over for driving at high speeds while trying to outrun a paparazzo.

This pursuit for the perfect shot took a fatal turn Tuesday when a photographer was hit by an SUV on Sepulveda Boulevard after taking photos of Bieber's Ferrari. And the singer now finds himself at the center of the familiar debate about free speech and the aggressive tactics of the paparazzi.

Since Princess Diana's fatal accident in Paris in 1997 while being pursued by photographers, California politicians have tried crafting laws that curb paparazzi behavior. But some of those laws are rarely used, and attorneys have challenged the constitutionality of others.

On Wednesday, Bieber went on the offensive, calling on lawmakers to crack down.

"Hopefully this tragedy will finally inspire meaningful legislation and whatever other necessary steps to protect the lives and safety of celebrities, police officers, innocent public bystanders and the photographers themselves," he said in a statement.

It remained unclear if any legislators would take up his call. But Bieber did get some support from another paparazzi target, singer Miley Cyrus.

She wrote on Twitter that she hoped the accident "brings on some changes in '13 Paparazzi are dangerous!"

Last year, a Los Angeles County Superior Court judge threw out charges related to a first-of-its-kind anti-paparazzi law in a case involving Bieber being chased on the 101 Freeway by photographer Paul Raef. Passed in 2010, the law created punishments for paparazzi who drove dangerously to obtain images.

But the judge said the law violated 1st Amendment protections by overreaching and potentially affecting such people as wedding photographers or photographers speeding to a location where a celebrity was present.

The L.A. city attorney's office is now appealing that decision.

Raef's attorney, Dmitry Gorin, said new anti-paparazzi laws are unnecessary.

"There are plenty of other laws on the books to deal with these issues. There is always a rush to create a new paparazzi law every time something happens," he said. "Any new law on the paparazzi is going to run smack into the 1st Amendment. Truth is, most conduct is covered by existing laws. A lot of this is done for publicity."

Coroner's officials have not identified the photographer because they have not reached the next of kin. However, his girlfriend, Frances Merto, and another photographer identified him as Chris Guerra.

The incident took place on Sepulveda Boulevard near Getty Center Drive shortly before 6 p.m. Tuesday. A friend of Bieber was driving the sports car when it was pulled over on the 405 Freeway by the California Highway Patrol. The photographer arrived near the scene on Sepulveda, left his car and crossed the street to take photos. Sources familiar with the investigation said the CHP told him to leave the area. As he was returning to his vehicle, he was hit by the SUV.

Law enforcement sources said Wednesday that it was unlikely charges would be filed against the driver of the SUV that hit the photographer.

Veteran paparazzo Frank Griffin took issue with the criticism being directed at the photographer as well as other paparazzi.

"What's the difference between our guy who got killed under those circumstances and the war photographer who steps on a land mine in Afghanistan and blows himself to pieces because he wanted the photograph on the other side of road?" said Griffin, who co-owns the photo agency Griffin-Bauer.

"The only difference is the subject matter. One is a celebrity and the other is a battle. Both young men have left behind mothers and fathers grieving and there's no greater sadness in this world than parents who have to bury their children."

Others, however, said the death focuses attention on the safety issues involving paparazzi

"The paparazzi are increasingly reckless and dangerous. The greater the demand, the greater the incentive to do whatever it takes to get the image," said Blair Berk, a Los Angeles attorney who has represented numerous celebrities. "The issue here isn't vanity and nuisance, it's safety."

richard.winton@latimes.com

andrew.blankstein@latimes.com

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A Google-a-Day Puzzle for Jan. 3

Our good friends at Google run a daily puzzle challenge and asked us to help get them out to the geeky masses. Each day’s puzzle will task your googling skills a little more, leading you to Google mastery. Each morning at 12:01 a.m. Eastern time you’ll see a new puzzle posted here.

SPOILER WARNING:
We leave the comments on so people can work together to find the answer. As such, if you want to figure it out all by yourself, DON’T READ THE COMMENTS!

Also, with the knowledge that because others may publish their answers before you do, if you want to be able to search for information without accidentally seeing the answer somewhere, you can use the Google-a-Day site’s search tool, which will automatically filter out published answers, to give you a spoiler-free experience.

And now, without further ado, we give you…

TODAY’S PUZZLE:

Note: Ad-blocking software may prevent display of the puzzle widget.

Ken is a husband and father from the San Francisco Bay Area, where he works as a civil engineer. He also wrote the NYT bestselling book "Geek Dad: Awesomely Geeky Projects for Dads and Kids to Share."

Read more by Ken Denmead

Follow @fitzwillie and @wiredgeekdad on Twitter.

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U.S. soul singer Bobby Womack says he has signs of dementia

(Reuters) – U.S. singer-songwriter Bobby Womack said he is beginning to show early symptoms of Alzheimer’s disease, including trouble remembering names and song lyrics.

“The doctor said, ‘You have signs of Alzheimer’s,’” Womack, 68, told Britain’s BBC Radio 6 music station over the weekend. “He said it’s not bad yet but it’s going to get worse.”

He added: “How can I not remember songs that I wrote? That’s frustrating.”

The 2009 Rock and Roll Hall of Fame inductee, whose hits include “Woman’s Gotta Have It” and “If You Think You’re Lonely Now,” suffered a number of health problems in the past year.

In March it was disclosed that he was diagnosed with colon cancer, which was later successfully treated, and he also underwent what was termed a “minor heart procedure.”

Other recent health issues included prostate cancer, pneumonia and collapsed lungs.

The soul veteran in October won the best album award from the British magazine Q for his 2012 release, “The Bravest Man in the Universe,” beating out much younger competition.

Womack got his start in the music business as the lead singer in the soul group The Valentinos, which he formed with his brothers, and played guitar for Sam Cooke.

He also wrote The Rolling Stones’ first chart topper in the UK, 1964′s “It’s All Over Now.”

(Reporting by Eric Kelsey, editing by Jill Serjeant and Cynthia Osterman)

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Hillary Clinton Is Discharged From Hospital After Blood Clot

Hillary Rodham Clinton, whose globe-trotting tour as secretary of state was abruptly halted last month by a series of health problems, was discharged from a New York hospital on Wednesday evening after several days of treatment for a blood clot in a vein in her head.

The news of her release was the first welcome sign in a troubling month that grounded Mrs. Clinton — preventing her from answering questions in Congress about the State Department’s handling of the lethal attack on an American mission in Libya or being present when President Obama announced Senator John Kerry as his choice for her successor when she steps down as secretary of state.

“Her medical team advised her that she is making good progress on all fronts, and they are confident she will make a full recovery,” Philippe Reines, a senior adviser to Mrs. Clinton, said in a statement.

Mrs. Clinton, 65, was admitted to NewYork-Presbyterian/Columbia hospital on Sunday after a scan discovered the blood clot. The scan was part of her follow-up care for a concussion she sustained more than two weeks earlier, when she fainted and fell, striking her head. According to the State Department, the fainting was caused by dehydration, brought on by a stomach virus. The concussion was diagnosed on Dec. 13, though the fall had occurred earlier that week.

The clot was potentially serious, blocking a vein that drains blood from the brain. Untreated, such blockages can lead to brain hemorrhages or strokes. Treatment consists mainly of blood thinners to keep the clot from enlarging and to prevent more clots from forming, and plenty of fluids to prevent dehydration, which is a major risk factor for blood clots.

Photographed leaving the hospital, Mrs. Clinton and her husband, former President Bill Clinton, and their daughter, Chelsea, appeared elated. In a Twitter post on Wednesday, Chelsea Clinton said, “Grateful my Mom discharged from the hospital & is heading home. Even more grateful her medical team confident she’ll make a full recovery.”

Dr. David J. Langer, a brain surgeon and associate professor at Hofstra North Shore-LIJ School of Medicine, said that Mrs. Clinton would need close monitoring in the next days, weeks and months to make sure her doses of blood thinners are correct and that the clot is not growing. Dr. Langer is not involved in her care.

Mrs. Clinton’s illness cuts short what would have been a victory lap for her at the State Department. With only a few weeks before the end of President Obama’s first term — the time frame she set for own departure — she will be able to do little more than say goodbye to her troops.

But she will, at least theoretically, be able to testify before the Senate and House about the attack on the American mission in Benghazi, Libya, which killed four Americans, including Ambassador J. Christopher Stevens. She was not able to appear at a hearing in December because of her illness. Republicans, who have sharply criticized the Obama administration’s handling of the attack and its aftermath, had demanded that she appear to explain the department’s role, though in recent days they have modulated their request.

Mrs. Clinton’s blood clot formed in a large vein along the side of her head, behind her right ear, between the brain and the skull. The vein, called the right transverse sinus, has a matching vessel on the left side. These veins drain blood from the brain; blockages can cause strokes or brain hemorrhages. But if only one transverse sinus is blocked, the vein on other side can usually handle the extra flow.

In one sense, Mrs. Clinton was lucky: a clot higher in this drainage system, in a vessel with no partner to take the overflow, would have been far more dangerous, according to Dr. Geoffrey T. Manley, the vice chairman of neurological surgery at the University of California, San Francisco. He is not involved in her care.

The fact that Mrs. Clinton had a blood clot in the past — in her leg, in 1998 — suggests that she may have a tendency to form clots, and may need blood-thinners long-term or even for the rest of her life, Dr. Manley said.

One major risk to people who take blood thinners is that the drugs increase bleeding, so blows to the head from falls or other accidents — like the fall that caused Mrs. Clinton’s concussion — become more dangerous, and more likely to cause a brain hemorrhage. Even so, the medication should not interfere with Mrs. Clinton’s career, Dr. Manley said.

“There are lots of people running around on anticoagulants today,” he said. “I don’t see any way it would have any long-term consequences.”

He also said there was no reason to think that this type of clot would recur; he said he had treated many patients for the same condition and had never seen one come back with it again.

Dr. Langer said the vein blocked by the clot might or might not reopen. Sometimes, he said, the clot persists and the body covers it with tissue that closes or narrows the blood vessel. As long as the vein on the other side of the head is open, there is no problem for the patient.

One thing that is unclear, and that may never be known for sure, is what caused Mrs. Clinton’s blood clot. Around the second week in December, she reportedly contracted a stomach virus that caused vomiting and dehydration, passed out, fell and struck her head. A concussion was diagnosed several days after the fall, on Dec. 13, and the public was told Sunday that she had a blood clot, though its location was not revealed until the next day.

She had several risk factors for clots, including dehydration and her previous history of a clot. In addition, women are more prone than men to this type of clot, particularly when dehydrated. The fall may also have been a factor, though it is not clear whether her head injury was serious enough to have caused a blood clot. The type of clot she had is far more likely to be associated with a skull fracture than with a concussion, several experts said.

Did overwork — frequent overseas trips, perpetual jet lag, high-pressure meetings — make her ill? Mrs. Clinton has kept up a punishing schedule since she declared her candidacy for president in 2007. Having logged more than 950,000 miles and visited 112 countries, she is one of the most-traveled secretaries of state in history. She has put on weight and in recent times appeared fatigued. But the same could be said of plenty of people who do not develop clots in their heads.

“You cannot tell me that her hard work resulted in this,” Dr. Langer said. “I can’t imagine that you could make that judgment.”

In theory, Dr. Manley said, exhaustion can weaken the immune system temporarily, and lower a person’s resistance to infections like the stomach virus that apparently started Mrs. Clinton’s problems. But in his opinion, the most important contributing factor to her blood clot was probably the head injury from her fall.

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Some Breaks for Industries Are Retained in Fiscal Deal

Nearly $250 million for Hollywood. Over $330 million for the railroad industry. More than $220 million for rum producers. And $62 million for doing business in American Samoa.

While taxes are expected to increase for most Americans as a result of the deal between the White House and Congress to end the fiscal impasse in Washington, corporate America was more fortunate. A bevy of tax breaks and credits that had been scheduled to expire at the end of 2012 will be extended for another year, costing taxpayers $46.1 billion over the next decade, according to Congress’s Joint Committee on Taxation.

The preservation of these subsidies and deductions has become a perennial Washington ritual in recent years, with lobbyists and companies and their allies on Capitol Hill securing their survival in the fine print of the tax code. Washington’s inability to close many of these loopholes is a sign of just how reluctant business is to sacrifice prized subsidies despite loud calls from many chief executives in recent months to raise taxes, cut spending and deal with huge budget deficits.

“Except for the people who like it, it’s a giveaway,” said Eric Toder, co-director of the Urban-Brookings Tax Policy Center. “It’s hard to mobilize opposition, but the people who benefit from it benefit a lot.”

Many of the provisions survive because they are so obscure. A $62 million tax credit for employers in American Samoa benefits StarKist, which is the largest private employer in the South Pacific island chain, with nearly 2,000 workers there. The tax break was supported by Jeff Bingaman, Democrat of New Mexico, who as former chairman of the Senate Energy and Natural Resources Committee was an advocate for American territories that lack formal Senate representation.

“We support the development credit, and it’s a key factor in our ability to maintain competitive operations in American Samoa,” said Mary Sestric, a spokeswoman for StarKist. “This is a big priority for us.”

Corporations were keenly sensitive to changes in broader tax policy, in addition to benefiting from direct tax breaks. For example, Goldman Sachs distributed $65 million in stock to 10 senior executives in December instead of January, when the firm typically makes such awards. That move helped them avoid the higher tax rates that will now be imposed on income of $400,000 or more.

The chief executive of Goldman, Lloyd C. Blankfein, was among the most prominent corporate executives who backed higher taxes as part of a broader deficit-reduction package. He and other business leaders also met with President Obama late last year as the White House sought support from corporate America during negotiations with Republicans in Congress.

Some subsidies, like a break for research by companies, can actually have long-term benefits for the economy, defenders argue.

Others, like the one that allows filmmakers to deduct the first $15 million in production expenses for movies made in the United States, are much more narrowly focused but have loyal supporters that manage to keep them alive year after year. Another beneficiary of Congressional largess is Nascar, which will enjoy a $78 million subsidy for racetrack construction over the next 10 years.

“Once they get in, they tend to stay in,” said Alan Auerbach, director of the Robert D. Burch Center for Tax Policy and Public Finance at the University of California, Berkeley.

Besides the $46.1 billion in corporate incentives over the next 10 years, there is another $18.1 billion in breaks for alternative energy, much of that going to companies as well. Producers of biodiesel, for example, will reap more than $2 billion in tax breaks. And while it may not exactly be an alternative source of energy, producers of coal on Indian lands retained $1 million in tax breaks — a provision backed by Max Baucus, the Montana Democrat who is chairman of the Finance Committee.

The wind industry, a chief beneficiary of support from Washington, will get $12 billion in subsidies over the next decade. In fact, the benefits that were included for the wind sector are slightly broader now than in previous years.

Under the new rules, contained in the legislation that Mr. Obama signed on Wednesday, new wind farms will be covered by a production tax credit or an investment tax credit similar to the ones that just expired, but the projects will not need to be finished by the end of this year to qualify; they simply must have been started in 2013.

The American Wind Energy Association, a trade group, said in an e-mail to its members that the change was made by Congress “specifically in order to accommodate the business timelines of our industry.” The business has been in a tax-driven boom-and-bust cycle.

The renewal of the tax benefits was pushed strongly by Mr. Bingaman, Mr. Baucus and Charles E. Grassley, Republican of Iowa. When the Senate began considering “tax extenders,” or continuations of various tax breaks, wind advocates pushed to have all of them included.

“There always seemed to be some bipartisan support for this,” said Philip D. Tingle, a lawyer who specializes in energy taxes. “The element, the issue was, how they were going to pay for it.” The renewal will probably cost the Treasury about $12 billion, although the wind industry insists that it will generate so much taxable activity that total tax revenue, including those at the state and local level, will exceed the tax expenditure.

The industry undertook a large lobbying campaign and says it generated more than 750,000 letters, e-mails and other communications with Congress. It took nearly 100 members of Congress on tours of wind farms and factories where components are built. The issue may be more regional than partisan; according to the American Wind Energy Association, 80 percent of wind farms are in Congressional districts represented by Republicans, as are 67 percent of the factories.

The tax credits were also extended to cover electricity made from biomass, tides and ocean waves, landfill methane and improvements to hydroelectric stations.

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The 'fiscal cliff' con game

Whatever the ultimate shape of the "fiscal cliff" solution that has preoccupied all Washington, and a fair swath of the rest of country, in the final days of 2012 and into the new year, Americans of all walks of life should be asking themselves this question: How do we like being conned?

The deal, passed by the Senate on New Year's morning, was made final late Tuesday when the House of Representatives signed on. Its essential elements include expiration of the President George W. Bush-era income and capital gains tax cuts on couples' incomes over $450,000, and a modest increase in the estate tax.

Unemployment benefits and tax credits for lower-income families will be extended. The payroll tax holiday that replaced a low- and middle-income tax credit in 2009 will end, but the tax credit won't return. Many other items, including the fate of automatic spending cuts mandated by the 2011 debt-ceiling deal, are being put off for weeks or months. Another debt-ceiling fight looms on the near horizon.

Almost everything mentioned above involves a con game of one sort or another, because almost none of it is what it seems on the surface. Since such fakery is certain to continue well into the new year, here's a quick guide to its basic features.

The deficit con: The big daddy. Despite the lawmakers' claims that the debate has been about closing the federal deficit and reducing the federal debt, none of the negotiating over the past weeks has dealt with those issues. Indeed, the tax and spending package will widen the deficit by some $4 trillion over 10 years, compared with what would happen if the tax increases and spending cuts mandated by existing law were implemented.

The House Republican caucus has consistently looked for ways to protect high-income taxpayers from a tax increase, at the expense of beneficiaries of government programs such as enrollees in Social Security and Medicare. If there's a dominant preoccupation with cutting the deficit lurking somewhere in that mind-set, good luck finding it.

The shared sacrifice con: If the goal has been for an approach to deficit cutting balanced among economic strata — and Democrats and Republicans both pay lip service to this notion — then the final deal is a fraud. Every working person earning up to $113,700 in wages this year will shoulder an instant tax increase of 2%. That's because the payroll tax holiday enacted in 2010 is expiring.

The tax holiday, which cut the employee's share of the Social Security tax to 4.2% from 6.2% of income up to the annual wage cap, was always designed as a temporary stimulus measure. But few people expected that it would expire at a single stroke — and without a countervailing working-class tax credit to soften the blow.

Monkeying with the payroll tax was never a great idea, because it undermined Social Security's essential funding mechanism. But what's often forgotten is that the holiday was implemented to replace an existing tax break for the middle class — the Making Work Pay credit—opposed by the GOP. But the credit isn't coming back, so the end of the holiday means a pure tax increase on the 98% of working Americans earning $113,700 or less in wages. For a couple touching, say, $80,000, the increase will come to $1,600.

Quiz: How much do you know about the "fiscal cliff?"

Compare that with the break reaped by taxpayers declaring income in the $250,000 to $450,000 range. That's the difference between the threshold at which President Obama proposed restoring pre-Bush tax rates and the level enacted by Congress. Exempting that slice of income from higher taxes saves up to $9,200 in taxes for families earning $450,000 or more (depending on the cost of phaseouts of exemptions and deductions for those taxpayers).

The estate tax con: There's no purer giveaway to the wealthy than this. The final deal raises the tax to 40% from 35% on estates over $10 million. (That figure is for couples, whose estates are each entitled to a $5-million exemption upon their deaths.) The alternative was to return to 2009 law, which set the tax at 45% on couples' estates more than $7 million.

Who pays the estate tax? In 2011, about 1,800 taxpayers died leaving estates of more than $10 million. Their average estate was somewhere from $30 million to $40 million. Their heirs cashed in on some of the most nimble tax planning on Earth: Although the statutory top rate was 35%, the average rate on estates of even $20 million-plus (the average gross value of which was $65 million) came to only 16.2%.

Estate tax bonus babies long have been protected by the myth that the tax falls heavily, and unjustly, on small family farms and businesses. The Washington-based Tax Policy Center found, however, that fewer than 50 small farms and businesses paid any estate tax in 2011. Their liability came to less than one-tenth of 1% of the total collected. On the other hand, more than 50% of the estate tax was paid by people whose income placed them in the top tenth of 1% of all taxpayers. These are the people protected by estate tax opponents.

The debt ceiling con: The original of this con is what put us at the fiscal cliff in the first place, for the automated spending cuts being dealt with now were put in place as the GOP's price to raise the federal debt ceiling and stave off a government default in 2011. The debt ceiling was not designed as a constraint when it was created in 1917 — it was convenient blanket authority for the Treasury to issue debt so that Congress wouldn't have to vote permission each time a new bond had to be floated.

Approval was always routine — the limit was raised 91 times between 1960 and the showdown in 2011. Now it's a hostage-taking situation, destined to return in the next month or two when Republicans who didn't get what they wanted in this week's cliffhanger menace the creditworthiness of the U.S. again.

For a brief shining moment, President Obama dreamed of folding an end to the debt limit into a fiscal cliff deal, but that didn't happen. The idea that the debt limit discourages fiscal irresponsibility is a scream. It doesn't now, and never has, stopped Congress from enacting any spending plan or tax break it pleases, creating a budget demand that has to be paid for with, yes, debt. If Congress wants less debt, it can cut spending or raise taxes. The debt limit is a dangerous weapon in the hands of irresponsible legislators, and it's time to take it out of their hands.

The bond vigilante con: This is the bedrock con that fuels deficit hawkishness. The idea is that if America doesn't get its debt under control, it will be punished by unhappy bond investors worldwide. U.S. interest rates will soar and the standard of living will plunge.

This con depends on voters overlooking that it hasn't happened. U.S. government bonds remain the most sought-after in the world. Remember August 2011, when Standard & Poor's cut America's credit rating because of poor fiscal policy and dysfunctional government? Neither condition has improved, but the yield on the 30-year Treasury bond has fallen from 3.75% to 2.82%, and on the 10-year note from 2.14% to 1.68%.

The bogeymen of higher interest rates and inflation that are supposed to follow inevitably from our current level of deficit spending have simply not materialized, and aren't visible on the horizon. Moreover, history suggests that more typically they're responses to vigorous economic growth, not to policies aimed at reviving recovery.

That's a clue that the whole fiscal cliff affair is a major con. There is no reason for the country to suffer now the austerity embodied in the spending cuts and tax hikes that were to come due Jan. 1; what's needed is continued stimulus to complete the economic recovery. Indeed, the starkness of the Jan. 1 deadline is itself a con — nothing except its own inaction prevents Congress from temporarily moderating the effects of the cliff by voting to defer tax increases and spending cuts, as it did this week.

In the golden age of individualistic rural America so beloved of today's conservative dreamers, people who perpetrated cons such as these would be tarred, feathered and ridden into the sunset on a rail. Today we allow them to set the agenda in Washington. Is that supposed to be progress?

Michael Hiltzik's column appears Sundays and Wednesdays. Reach him at mhiltzik@latimes.com, read past columns at latimes.com/hiltzik, check out facebook.com/hiltzik and follow @latimeshiltzik on Twitter.

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Heartwarming moments defy chill at Rose Parade

PASADENA, Calif. (AP) — A couple who became husband and wife on the “Love Float,” a surprise reunion between a returning soldier and his little boy, and a grand marshal famed globally for her chimpanzee research were among the highlights of the 124th Rose Parade on Tuesday.

The parade’s spectacular 42 floral floats brightened an otherwise cloudy New Year’s morning and boosted the spirits of a chilled crowd estimated at some 700,000 spectators lining the 5-mile route.

“The only way that you’re going to experience the Rose Parade is to be here in person,” said Los Angeles resident Gineen Alcantara-Nakama, who camped out Monday night to save front row sidewalk spots.

“Growing up, I watched it on television, but it’s not the same — the smell, the atmosphere, smelling the flowers as they come down the street. And the energy. It’s like being with family all night long.”

Spectators rose to a standing ovation when Army Sgt. First Class Eric Pazz, who was riding on the Natural Balance Pet Foods float along with other service members, got off the float and walked over to his surprised wife Miriam and 4-year-old son Eric Jr., who came running out of the stands into the arms of his 32-year-old father.

Miriam Pazz had been told she had won a contest to attend the parade and did not know her husband, who is deployed in Afghanistan, would be there. A native of Clio, Mich., Pazz is a highly decorated soldier who has also served in Iraq. The family, who currently lives in Germany, climbed aboard the float for the rest of the route.

Cheers also went up for a Chesapeake, Va., couple who tied the knot aboard Farmers Insurance “Love Float.”

Gerald Sapienza and Nicole Angelillo were high school classmates who reconnected 10 years later and won the parade wedding over three other couples in a nationwide contest. They received a trip to Pasadena, a wedding gown, tuxedo, rings, marriage license fees, Rose Bowl game tickets and hair and makeup for the bride.

The parade’s theme this year was “Oh the Places You’ll Go!” named in honor of the Dr. Seuss book. It served as a fitting slogan for grand marshal British primatologist Jane Goodall, who has spent much of her life in Tanzania studying chimpanzees.

Goodall chose conservation as her message for the parade

“My dream for this New Year’s Day is for everyone to think of the places we can all go if we work together to make our world a better place,” said Goodall, 78.

“Every journey starts with a step and I am pleased to see the Tournament of Roses continue to take steps toward not only celebrating beauty and imagination, but also a cleaner environment.”

This year’s parade also saw the first-ever float entered by the Defense Department.

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

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

According to parade rules, every inch of the floats must be covered with flowers or plant material, most of it applied by volunteers in the last weeks of December.

Besides floats, the parade also featured 23 marching bands and 21 equestrian units from around the world.

Banda El Salvador, a 200-plus member marching band and folkloric dance troupe, played sassy Latin rhythms and paid homage to their Central American country by dressing in the national colors of blue and white and shouting “Arriba El Salvador!”

The Aguiluchos band from Puebla, Mexico, earned cheers for their fancy footwork and vaquero rope tricks. Colorful dancers from Costa Rica and South Korea were other crowd pleasers.

Die-hard parade fans staked out their spots overnight or in pre-dawn hours with folding chairs, hammocks and portable barbeque grills despite frosty temperatures.

Emergency personnel received a number of cold-weather exposure calls, police department spokeswoman Lisa Derderian told City News Service.

As of 8 a.m. Tuesday, police had made a total of 22 arrests along the parade route since 6 p.m. Monday, said police Lt. Rick Aversan. All but one arrest were for suspected public intoxication. The other was for suspected possession of burglary tools that could have been used to break into cars, police said.

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Drug Makers Losing a Bid to Foil Generic Painkillers

Public officials have long urged makers of powerful painkillers to do more to make the medications harder to crush and abuse. But now that some companies have done so, they want something in return — a ban on generic versions of the drugs they make that do not have such tamper-resistant designs. 

Stuart Isett for The New York Times

Purdue Pharma’s OxyContin

Purdue Pharma LP

Tablets of OxyContin have been made more resistant to abuse. At left, a tablet crushed into powder. Right, a reformulated tablet does not easily turn into powder when it is crushed.

In coming months, generic drug producers are expected to introduce cheaper versions of OxyContin and Opana, two long-acting narcotic painkillers, or opioids, that are widely abused.

But in hopes of delaying the move to generics, the makers of the brand name drugs, Purdue Pharma and Endo Pharmaceuticals, have introduced versions that are more resistant to crushing or melting, techniques abusers use to release the pills’ narcotic payloads.

The two drug makers, which say they are motivated not by profit but by public safety, have also been waging a multifront political and legal war to block sales of generics that are not tamper-resistant.

The companies argue that the older designs will feed street demand for strong painkillers, drugs that are involved in more than 15,000 overdose-related deaths a year. While some experts say the new tamper-resistant products are not a cure-all for the abuse problem, others say they represent an important step forward.

“I think it would be a shame if the government would allow generics to come in without any tamper-resistant properties,” said Dr. Lynn R. Webster, a specialist in Salt Lake City who has consulted with companies developing such safeguards. Over the last year, Purdue Pharma and Endo have backed legislation in Congress that would require many opioids to be tamper-resistant, and lobbied in favor of similar state laws.

They have also urged the Food and Drug Administration to give their tamper-resistant designs a stamp of safety approval that other manufacturers would have to match. The agency does not currently differentiate between drugs that have abuse-resistant qualities and those that do not.

Thus far, the companies’ efforts have failed. In mid-December, a federal judge threw out a lawsuit by Endo that would have blocked the F.D.A. from allowing generic versions of its drug, Opana, to go on sale in January. A recent effort by some doctors and local officials in Canada to deter sales of generic versions of OxyContin there fell flat. While companies like Purdue Pharma insist the public’s health is their main concern, others note that producers introduced tamper-resistant versions of their products just as the drugs were about to lose patent protection. In court papers filed in response to Endo’s lawsuit, the F.D.A. described the company’s action as a “thinly veiled attempt to maintain its market share and block generic competition.”

An F.D.A. official, Dr. Douglas C. Throckmorton, said the agency expected to issue guidance this month that would lay out the types of scientific data that drug producers would have to submit to support a claim that an opioid’s design or formulation helped to deter its abuse.

Companies are developing a variety of methods to do that. The new OxyContin pill turns into a gummy mass when an abuser crushes it, and the Opana pill is designed to break into large pieces when manipulated. Other methods include pills that contain a second drug reversing the opioid’s narcotic effects if taken inappropriately.

“We understand the value in developing appropriate abuse-resistant technology and we want to find a way of incentivizing that,” said Dr. Throckmorton, the F.D.A.’s deputy director for regulatory programs. “But we also understand the value of generics for patients.”

A study published in 2012 in a medical journal, The Journal of Pain, found that the percentage of people treated at drug-abuse clinics who reported abusing OxyContin fell significantly since the introduction of the tamper-resistant version.

Some of those abusers said they had switched to other long-acting opioids that were easier to abuse like Opana — before its reformulation — or to illicit drugs like heroin, according to the study, which was financed by Purdue Pharma.

But the generic versions of OxyContin and Opana are expected to be significantly cheaper than the tamper-resistant versions of those drugs. At time of introduction in late 2010, the price of the new version of OxyContin was about $6 per 40 milligram tablet, the same then as the price that was not tamper-resistant. Since then, the price of the new version has risen to about $6.80 for that strength tablet. Opana costs about the same amount for a pill of the same pain-killing strength.

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Amid Pressure, House Passes Fiscal Deal

Luke Sharrett for The New York Times

President Obama spoke at the White House after the House vote on Tuesday. More Photos »

WASHINGTON — Ending a climactic fiscal showdown in the final hours of the 112th Congress, the House late Tuesday passed and sent to President Obama legislation to avert big income tax increases on most Americans and prevent large cuts in spending for the Pentagon and other government programs.

The measure, brought to the House floor less than 24 hours after its passage in the Senate, passed 257 to 167 with 85 Republicans joining 172 Democrats in voting to allow income taxes to rise for the first time in two decades, in this case for the highest-earning Americans. Voting no were 151 Republicans and 16 Democrats.

The bill is expected to be signed quickly by Mr. Obama, who won re-election on a promise to increase taxes on the wealthiest Americans to force them to pay a larger share of the government budget.

Mr. Obama strode into the White House briefing room shortly after the vote, less to hail the end of this fiscal crisis than to lay out a marker for the next one.

“The one thing that I think hopefully the new year will focus on is seeing if we can put a package like this together with a little bit less drama, a little less brinkmanship, and not scare the heck out of folks quite as much,” he said.

But he warned Republicans against trying to use a forthcoming vote on raising the debt ceiling to extract spending concessions.

“While I will negotiate over many things, I will not have another debate with this Congress over whether or not they should pay the bills they’ve already racked up through the laws they have passed,” he said. “Let me repeat, we can’t not pay bills that we’ve already incurred.”

In approving the measure after days of legislative intrigue, Congress concluded its final and most pitched fight over fiscal policy, the culmination of two years of battles over taxes, the federal debt, spending and what to do to slow the growth in popular social programs like Medicare.

The decision by the Republican leadership to allow the vote came despite widespread scorn among House Republicans for the bill — passed overwhelmingly by the Senate in the early hours of New Year’s Day — because it did not include significant spending cuts in health and other social programs. They say cuts are essential to any long-term solution to the nation’s debt.

Democrats, while hardly placated by the compromise bill, celebrated Mr. Obama’s nominal victory in his final showdown with House Republicans in the 112th Congress, who began their term emboldened by scores of new, conservative members whose reach to the right ultimately tipped them over.

“The American people are the real winners tonight,” Representative Bill Pascrell Jr., Democrat of New Jersey, said on the House floor, “not anyone who navigates these halls.”

Not a single leader among House Republicans came to the floor to speak in favor of the bill though Speaker John A. Boehner, who does not take part in every roll call, voted in favor. Representative Eric Cantor of Virginia, the majority leader, and Representative Kevin McCarthy of California, the No. 3 Republican, voted no. Representative Paul D. Ryan, the budget chairman who was the Republican vice-presidential candidate, supported the bill.

Despite the party divisions, many other Republicans in their remarks characterized the measure, which allows taxes to go up on household income over $400,000 for individuals and $450,000 for couples but makes permanent tax cuts for income below that level, a victory of sorts, even as so many of them declined to vote for it.

“After more than a decade of criticizing these tax cuts,” said Representative Dave Camp of Michigan, “Democrats are finally joining Republicans in making them permanent. Republicans and the American people are getting something really important, permanent tax relief.”

The dynamic with the House was a near replay of a fight at the end of 2011 over a payroll tax break extension. In that showdown, Senate Democrats and Republicans passed legislation, House Republicans fulminated, but they were eventually forced to swallow it.

On Tuesday, as they got a detailed look at the Senate’s fiscal legislation, House Republicans ranging from Midwest pragmatists to Tea Party-blessed conservatives voiced serious reservations about the measure, emerging from a lunchtime New Year’s Day meeting with their leaders, eyes flashing and faces grim, insisting they would not accept a bill without substantial savings from cuts.

Robert Pear contributed reporting.

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