Incomes see largest drop in 20 years

U.S. consumer spending rose in January as Americans spent more on services, with savings providing a cushion after income recorded its biggest drop in 20 years.

Income tumbled 3.6 percent, the largest drop since January 1993. Part of the decline was payback for a 2.6 percent surge in December as businesses, anxious about higher taxes, rushed to pay dividends and bonuses before the new year.

A portion of the drop in January also reflected the tax hikes. The income at the disposal of households after inflation and taxes plunged a 4.0 percent in January after advancing 2.7 percent in December.

The Commerce Department said on Friday consumer spending increased 0.2 percent in January after a revised 0.1 percent rise the prior month. Spending had previously been estimated to have increased 0.2 percent in December.

January's increase was in line with economists' expectations. Spending accounts for about 70 percent of U.S. economic activity and when adjusted for inflation, it gained 0.1 percent after a similar increase in December.

Though spending rose in January, it was supported by a rise in services, probably related to utilities consumption. Spending on goods fell, suggesting some hit from the expiration at the end of 2012 of a 2 percent payroll tax cut. Tax rates for wealthy Americans also increased.

The impact is expected to be larger in February's spending data and possibly extend through the first half of the year as households adjust to smaller paychecks, which are also being strained by rising gasoline prices.

Economists expect consumer spending in the first three months of this year to slow down sharply from the fourth quarter's 2.1 percent annual pace.

With income dropping sharply and spending rising, the saving rate - the percentage of disposable income households are socking away - fell to 2.4 percent, the lowest level since November 2007. The rate had jumped to 6.4 percent in December.

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Sinkhole swallows Florida man inside house

Brother of sinkhole victim talks to reporters at the scene.

TAMPA, Fla. -- A 36-year-old Florida man was feared dead on Friday after a sinkhole suddenly opened beneath the bedroom of his suburban Tampa home swallowing him, police and fire officials said.

Rescuers responded to a 911 call late on Thursday after the man's family reported hearing a loud crash in the house and rushed to his bedroom.

“All they could see was a part of a mattress sticking out of the hole,” said Hillsborough County Fire Rescue Chief Ron Rogers. “Essentially the floor of that room had opened up.”

A sheriff deputy who arrived at the scene rescued the man's brother who jumped in the sinkhole and tried to rescue him. Three other adults and a child were in the house at the time the sinkhole opened up.

"He's down there but we can't hear anything and we can't see anything," said Ronnie Rivera, a Hillsborough County Fire Rescue spokesman. "We can't confirm anything but it's been several hours."

The victim screamed for help and his brother, Jeremy Bush, jumped in to try to save him but was unsuccessful.

Bush tried again using a shovel to dig but was pulled out by deputies as he was being sucked into the hole, Rivera said.

Bush told television reporters on scene, "I know in my heart he's dead."

About five other people reportedly lived inside the home, which has been occupied by the same family since 1974. The residents were taken to a local hotel and were given food.

Authorities have not been able to contact the missing man and ordered the evacuation of several nearby homes out of concern the sinkhole is continuing to grow.

Bill Bracken, the head of an engineering company assisting rescuers, said the sinkhole was as much as 30 feet (9 meters) in diameter and 20 feet (6 meters) deep.

“It started in the bedroom and it has been expanding outward and it's taking the house with it as it opens up,” Bracken said.

The risk of sinkholes is common in the state due to its porous geological bedrock, the Florida Department of Environmental Protection said.

As rainwater filters down it dissolves the rock causing erosion that can lead to underground caverns, which cause sinkholes when they collapse.

Rogers said officials lowered listening devices and cameras into the hole but had so far not detected any signs of life.

Rescue efforts were suspended on Friday over concerns about the house's stability, Rogers said.

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Judge throws out part of Apple patent award against Samsung

March 1 (Reuters) - Celtic are surprised that arch-rivals Rangers were deemed to have gained no competitive advantage for making undisclosed payments to players and staff from 2000-11, the Scottish Premier League leaders said on Friday. Former champions Rangers were fined 250,000 pounds ($375,300) by the Scottish Premier League (SPL) on Thursday although the Glasgow club were told they could keep the titles they won during the 11-year period the payments were made. ...

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WHO: Slight cancer risk after Japan nuke accident

LONDON (AP) — Two years after Japan's nuclear plant disaster, an international team of experts said Thursday that residents of areas hit by the highest doses of radiation face an increased cancer risk so small it probably won't be detectable.

In fact, experts calculated that increase at about 1 extra percentage point added to a Japanese infant's lifetime cancer risk.

"The additional risk is quite small and will probably be hidden by the noise of other (cancer) risks like people's lifestyle choices and statistical fluctuations," said Richard Wakeford of the University of Manchester, one of the authors of the report. "It's more important not to start smoking than having been in Fukushima."

The report was issued by the World Health Organization, which asked scientists to study the health effects of the disaster in Fukushima, a rural farming region.

On March 11, 2011, an earthquake and tsunami knocked out the Fukushima plant's power and cooling systems, causing meltdowns in three reactors and spewing radiation into the surrounding air, soil and water. The most exposed populations were directly under the plumes of radiation in the most affected communities in Fukushima, which is about 150 miles (240 kilometers) north of Tokyo.

In the report, the highest increases in risk are for people exposed as babies to radiation in the most heavily affected areas. Normally in Japan, the lifetime risk of developing cancer of an organ is about 41 percent for men and 29 percent for women. The new report said that for infants in the most heavily exposed areas, the radiation from Fukushima would add about 1 percentage point to those numbers.

Experts had been particularly worried about a spike in thyroid cancer, since radioactive iodine released in nuclear accidents is absorbed by the thyroid, especially in children. After the Chernobyl disaster, about 6,000 children exposed to radiation later developed thyroid cancer because many drank contaminated milk after the accident.

In Japan, dairy radiation levels were closely monitored, but children are not big milk drinkers there.

The WHO report estimated that women exposed as infants to the most radiation after the Fukushima accident would have a 70 percent higher chance of getting thyroid cancer in their lifetimes. But thyroid cancer is extremely rare and one of the most treatable cancers when caught early. A woman's normal lifetime risk of developing it is about 0.75 percent. That number would rise by 0.5 under the calculated increase for women who got the highest radiation doses as infants.

Wakeford said the increase may be so small it will probably not be observable.

For people beyond the most directly affected areas of Fukushima, Wakeford said the projected cancer risk from the radiation dropped dramatically. "The risks to everyone else were just infinitesimal."

David Brenner of Columbia University in New York, an expert on radiation-induced cancers, said that although the risk to individuals is tiny outside the most contaminated areas, some cancers might still result, at least in theory. But they'd be too rare to be detectable in overall cancer rates, he said.

Brenner said the numerical risk estimates in the WHO report were not surprising. He also said they should be considered imprecise because of the difficulty in determining risk from low doses of radiation. He was not connected with the WHO report.

Some experts said it was surprising that any increase in cancer was even predicted.

"On the basis of the radiation doses people have received, there is no reason to think there would be an increase in cancer in the next 50 years," said Wade Allison, an emeritus professor of physics at Oxford University, who also had no role in developing the new report. "The very small increase in cancers means that it's even less than the risk of crossing the road," he said.

WHO acknowledged in its report that it relied on some assumptions that may have resulted in an overestimate of the radiation dose in the general population.

Gerry Thomas, a professor of molecular pathology at Imperial College London, accused the United Nations health agency of hyping the cancer risk.

"It's understandable that WHO wants to err on the side of caution, but telling the Japanese about a barely significant personal risk may not be helpful," she said.

Thomas said the WHO report used inflated estimates of radiation doses and didn't properly take into account Japan's quick evacuation of people from Fukushima.

"This will fuel fears in Japan that could be more dangerous than the physical effects of radiation," she said, noting that people living under stress have higher rates of heart problems, suicide and mental illness.

In Japan, Norio Kanno, the chief of Iitate village, in one of the regions hardest hit by the disaster, harshly criticized the WHO report on Japanese public television channel NHK, describing it as "totally hypothetical."

Many people who remain in Fukushima still fear long-term health risks from the radiation, and some refuse to let their children play outside or eat locally grown food.

Some restrictions have been lifted on a 12-mile (20-kilometer) zone around the nuclear plant. But large sections of land in the area remain off-limits. Many residents aren't expected to be able to return to their homes for years.

Kanno accused the report's authors of exaggerating the cancer risk and stoking fear among residents.

"I'm enraged," he said.

___

Mari Yamaguchi in Tokyo and AP Science Writer Malcolm Ritter in New York contributed to this report.

__

Online:

WHO report: http://bit.ly/YDCXcb

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Incomes see largest drop in 20 years

U.S. consumer spending rose in January as Americans spent more on services, with savings providing a cushion after income recorded its biggest drop in 20 years.

Income tumbled 3.6 percent, the largest drop since January 1993. Part of the decline was payback for a 2.6 percent surge in December as businesses, anxious about higher taxes, rushed to pay dividends and bonuses before the new year.

A portion of the drop in January also reflected the tax hikes. The income at the disposal of households after inflation and taxes plunged a 4.0 percent in January after advancing 2.7 percent in December.

The Commerce Department said on Friday consumer spending increased 0.2 percent in January after a revised 0.1 percent rise the prior month. Spending had previously been estimated to have increased 0.2 percent in December.

January's increase was in line with economists' expectations. Spending accounts for about 70 percent of U.S. economic activity and when adjusted for inflation, it gained 0.1 percent after a similar increase in December.

Though spending rose in January, it was supported by a rise in services, probably related to utilities consumption. Spending on goods fell, suggesting some hit from the expiration at the end of 2012 of a 2 percent payroll tax cut. Tax rates for wealthy Americans also increased.

The impact is expected to be larger in February's spending data and possibly extend through the first half of the year as households adjust to smaller paychecks, which are also being strained by rising gasoline prices.

Economists expect consumer spending in the first three months of this year to slow down sharply from the fourth quarter's 2.1 percent annual pace.

With income dropping sharply and spending rising, the saving rate - the percentage of disposable income households are socking away - fell to 2.4 percent, the lowest level since November 2007. The rate had jumped to 6.4 percent in December.

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First lady brings campaign for physical education to Chicago

First Lady Michelle Obama announced a new initiative in Chicago Thursday called "Let's Move Active Schools," which encourages physical education in schools. ( WGN - Chicago)

First lady Michelle Obama brought her high energy "Let's Move" campaign to Chicago today, where she announced a new phase of the initiative that will place a greater emphases on physical activity.

The "Active Schools" initiative, funded primarily by a $50 million grant from Nike Inc., will help pay for new physical education programs in schools that meet exercise standards.

Surrounded by athletic superstars including tennis champion Serena Williams, gymnast Gabby Douglas, San Francisco 49ers quarterback Colin Kaepernick and "The Biggest Loser" trainer Bob Harper, the first lady told 6,000 cheering Chicago Public Schools students gathered around the stage that they have the potential to be great.

"The only thing separating you out there and us on the stage is the choices you make in life," Obama said, after returning to the stage dressed in red and black exercise wear. Earlier in the program she wore a black business suit while thanking Nike and other corporations for supporting the program.

The athletes led the crowd of screaming and jumping students in an exercise routine at McCormick Place, 2301 S. Lake Shore Dr. The first lady and Mayor Rahm Emanuel, dressed in exercise clothes, joined in the high energy routine with loud techno music and colorful strobe lights.

The Nike donation, delivered over five years, will allow schools to partner with community organizations and other groups to provide exercise programs  to benefit children. Schools also will be able to implement physical education programs during the school day.

Education Secretary Arne Duncan, in an interview prior to the event, called the violence in Chicago "staggering" and suggested that such after school programs could have an impact on curbing it.

"Our families, our communities, our children deserve so much better," he said. "We have to allow our children to grow up in a safe environment."

Chicago is the third stop on the first lady's multi-city tour observing the 3rd anniversary of the "Let's Move" initiative.

As part of Chicago's efforts to curb obesity, officials announced a "Healthy CPS Action Plan," giving schools a comprehensive plan to improve health and wellness of students.

Earlier today, the Chicago Department of Public Health released new obesity numbers for Chicago Public Schools students. According to the report, 36.5 percent of children entering kindergarten are overweight or obese, as well as 48.6 percent of 6th graders and 44.7 percent of 9th graders.

dglanton@tribune.com

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Rodman tells Kim Jong Un he has 'friend for life'

SEOUL, South Korea (AP) — Ex-NBA star Dennis Rodman hung out Thursday with North Korea's Kim Jong Un on the third day of his improbable journey with VICE to Pyongyang, watching the Harlem Globetrotters with the leader and later dining on sushi and drinking with him at his palace.

"You have a friend for life," Rodman told Kim before a crowd of thousands at a gymnasium where they sat side by side, chatting as they watched players from North Korea and the U.S. play, Alex Detrick, a spokesman for the New York-based VICE media company, told The Associated Press.

Rodman arrived in Pyongyang on Monday with three members of the professional Harlem Globetrotters basketball team, VICE correspondent Ryan Duffy and a production crew to shoot an episode on North Korea for a new weekly HBO series.

The unlikely encounter makes Rodman the most high-profile American to meet Kim since the young North Korean leader took power in December 2011, and takes place against a backdrop of tension between Washington and Pyongyang. North Korea conducted an underground nuclear test just two weeks ago, making clear the provocative act was a warning to the United States to drop what it considers a "hostile" policy toward the North.

Kim, a diehard basketball fan, told the former Chicago Bulls star he hoped the visit would break the ice between the United States and North Korea, VICE founder Shane Smith said.

Dressed in a blue Mao suit, Kim laughed and slapped his hands on the table before him during the game as he sat nearly knee to knee with Rodman. Rodman, the man who once turned up in a wedding dress to promote his autobiography, wore a dark suit and dark sunglasses, but still had on his nose rings and other piercings. A can of Coca-Cola sat on the table before him in photos shared with AP by VICE.

"The crowd was really engaged, laughed at all of the Globetrotters antics, and actually got super loud towards the end as the score got close," said Duffy, who suited up for the game in a blue uniform emblazoned with "United States of America. "Most fun I've had in a while."

Kim and Rodman chatted in English, but Kim primarily spoke in Korean through a translator, Smith said after speaking to the VICE crew in Pyongyang.

"They bonded during the game," Smith said by telephone from New York after speaking to the crew. "They were both enjoying the crazy shots, and the Harlem Globetrotters were putting on quite a show."

The surprise visit by the flamboyant Hall of Famer known as "The Worm" makes him an unlikely ambassador at a time when North Koreans are girding for battle with the U.S. Just last week, Kim guided front line troops in military exercises.

North Korea and the U.S. fought on opposite sides of the three-year Korean War, which ended in a truce in 1953. The foes never signed a peace treaty, and do not have diplomatic relations.

Thursday's game ended in a 110-110 draw, with two Americans playing on each team alongside North Koreans, Detrick said. The Xinhua News Agency first reported on the game, citing witnesses who attended.

After the game, Rodman addressed Kim in a speech before a crowd of tens of thousands of North Koreans, telling him, "You have a friend for life," Detrick said.

At a lavish dinner at Kim's palace, the leader plied the group with food and drinks as the group made round after round of toasts.

"Dinner was an epic feast. Felt like about 10 courses in total," Duffy said in an email to AP. "I'd say the winners were the smoked turkey and sushi, though we had the Pyongyang cold noodles earlier in the trip and that's been the runaway favorite so far."

Duffy said he invited Kim to visit the United States, a proposal met with hearty laughter from the North Korean leader.

"Um ... so Kim Jong Un just got the (hash)VICEonHBO crew wasted ... no really, that happened," VICE producer Jason Mojica wrote on Twitter.

Rodman's trip is the second attention-grabbing U.S. visit this year to North Korea. Google's executive chairman, Eric Schmidt, made a four-day trip in January to Pyongyang, but did not meet the North Korean leader.

In Washington, the State Department refused comment on Rodman's visit or his meeting with Kim. "Private, individual Americans are welcome to take actions they see fit," spokesman Patrick Ventrell said.

He said the Obama administration wasn't in touch with Rodman and wasn't making an effort to contact him.

The administration had frowned on the trip by Schmitt and former New Mexico governor Bill Richardson, but has avoided criticizing Rodman's outing, saying it's about sports.

North Korea's invitation to a man known as much for his piercings, tattoos and bad behavior as for his basketball may seem inexplicable. But Kim is known to love the NBA, and has promoted sports since becoming leader.

"We knew that he's a big lover of basketball, especially the Bulls, and it was our intention going in that we would have a good will mission of something that's fun," Smith said. "A lot of times, things just are serious and everybody's so concerned with geopolitics that we forget just to be human beings."

Rodman's agent, Darren Prince, said Rodman wasn't concerned about criticism about making a visit to an enemy nation.

"Dennis called me last night and said it's been a great experience and he made this trip out of the love of the USA ," he said. "It's all about peace and love."

___

Associated Press NBA writer Brian Mahoney in New York and writer Bradley Klapper in Washington contributed to this report. Follow AP's Korea bureau chief Jean Lee at twitter.com/newsjean.

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Huge study: 5 mental disorders share genetic links

WASHINGTON (AP) — The largest genetic study of mental illnesses to date finds five major disorders may not look much alike but they share some gene-based risks. The surprising discovery comes in the quest to unravel what causes psychiatric disorders and how to better diagnose and treat them.

The disorders — autism, attention deficit-hyperactivity disorder or ADHD, bipolar disorder, major depressive disorder and schizophrenia — are considered distinct problems. But findings published online Wednesday suggest they're related in some way.

"These disorders that we thought of as quite different may not have such sharp boundaries," said Dr. Jordan Smoller of Massachusetts General Hospital, one of the lead researchers for the international study appearing in The Lancet.

That has implications for learning how to diagnose mental illnesses with the same precision that physical illnesses are diagnosed, said Dr. Bruce Cuthbert of the National Institute on Mental Health, which funded the research.

Consider: Just because someone has chest pain doesn't mean it's a heart attack; doctors have a variety of tests to find out. But there's no blood test for schizophrenia or other mental illnesses. Instead, doctors rely on symptoms agreed upon by experts. Learning the genetic underpinnings of mental illnesses is part of one day knowing if someone's symptoms really are schizophrenia and not something a bit different.

"If we really want to diagnose and treat people effectively, we have to get to these more fine-grained understandings of what's actually going wrong biologically," Cuthbert explained.

Added Mass General's Smoller: "We are still in the early stages of understanding what are the causes of mental illnesses, so these are clues."

The Psychiatric Genomics Consortium, a collaboration of researchers in 19 countries, analyzed the genomes of more than 61,000 people, some with one of the five disorders and some without. They found four regions of the genetic code where variation was linked to all five disorders.

Of particular interest are disruptions in two specific genes that regulate the flow of calcium in brain cells, key to how neurons signal each other. That suggests that this change in a basic brain function could be one early pathway that leaves someone vulnerable to developing these disorders, depending on what else goes wrong.

For patients and their families, the research offers no immediate benefit. These disorders are thought to be caused by a complex mix of numerous genes and other risk factors that range from exposures in the womb to the experiences of daily life.

"There may be many paths to each of these illnesses," Smoller cautioned.

But the study offers a lead in the hunt for psychiatric treatments, said NIMH's Cuthbert. Drugs that affect calcium channels in other parts of the body are used for such conditions as high blood pressure, and scientists could explore whether they'd be useful for psychiatric disorders as well.

The findings make sense, as there is some overlap in the symptoms of the different disorders, he said. People with schizophrenia can have some of the same social withdrawal that's so characteristic of autism, for example. Nor is it uncommon for people to be affected by more than one psychiatric disorder.

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Online:

http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(13)60223-8/abstract

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Economic expansion weakest since 2011

The U.S. economy barely grew in the fourth quarter although a slightly better performance in exports and fewer imports led the government to scratch an earlier estimate that showed an economic contraction.

Gross domestic product expanded at a 0.1 percent annual rate, the Commerce Department said on Thursday, missing the 0.5 percent gain forecast by analysts in a Reuters poll.

The growth rate was the slowest since the first quarter of 2011 and far from what is needed to fuel a faster drop in the unemployment rate.

However, much of the weakness came from a slowdown in inventory accumulation and a sharp drop in military spending. These factors are expected to reverse in the first quarter.

Consumer spending was more robust by comparison, although it only expanded at a 2.1 percent annual rate.

Because household spending powers about 70 percent of national output, this still-lackluster pace of growth suggests underlying momentum in the economy was quite modest as it entered the first quarter, when significant fiscal tightening began.

Initially, the government had estimated the economy shrank at a 0.1 percent annual rate in the last three months of 2012. That had shocked economists.

Thursday's report showed the reasons for the decline were mostly as initially estimated. Inventories subtracted 1.55 percentage points from the GDP growth rate during the period, a little more of a drag than initially estimated. Defense spending plunged 22 percent, shaving 1.28 points off growth as in the previous estimate.

There were some relatively bright spots, however. Imports fell 4.5 percent during the period, which added to the overall growth rate because it was a larger drop than in the third quarter. Buying goods from foreigners bleeds money from the economy, subtracting from economic growth.

Also helping reverse the initial view of an economic contraction, exports did not fall as much during the period as the government had thought when it released its advance GDP estimate in January. Exports have been hampered by a recession in Europe, a cooling Chinese economy and storm-related port disruptions.

Excluding the volatile inventories component, GDP rose at a revised 1.7 percent rate, in line with expectations. These final sales of goods and services had been previously estimated to have increased at a 1.1 percent pace.

Business spending was revised to show more growth during the period than initially thought, adding about a percentage point to the growth rate.

Growth in home building was revised slightly higher to show a 17.5 percent annual rate. Residential construction is one of the brighter spots in the economy and is benefiting from the Federal Reserve's ultra easy monetary policy stance, which has driven mortgage rates to record lows. (Reporting by Jason Lange; Editing by Andrea Ricci)
 

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Obama cites Navy threat, immigrants freed as cuts loom

Speaker of the House John Boehner tells Scott Pelley in a "CBS Evening News" interview that a budget deal is now out of his hands.

NEWPORT NEWS, Va. —

President Barack Obama on Tuesday warned of threats to Navy readiness and the government released hundreds of illegal immigrants due to budget pressure as automatic government spending cuts crept closer.

In the latest event staged by the White House to warn of the possible damage to public services, Obama spoke at the Newport News Shipbuilding shipyard where scheduled maintenance to the aircraft carrier USS Abraham Lincoln has been delayed by the budget crisis.

President Barack Obama on Tuesday warned of threats to Navy readiness and the government released hundreds of illegal immigrants due to budget pressure as automatic government spending cuts crept closer.

In the latest event staged by the White House to warn of the possible damage to public services, Obama spoke at the Newport News Shipbuilding shipyard where scheduled maintenance to the aircraft carrier USS Abraham Lincoln has been delayed by the budget crisis.

"The threat of these cuts has already forced the Navy to cancel the deployment, or delay the repair of certain aircraft carriers. One that's currently being built might not get finished," he warned.

The $85 billion across-the-board budget cuts are due to begin on Friday, and might eventually force the government to scale back on a host of services such as air traffic control, law enforcement and food safety inspections.

"These cuts are wrong. They are not smart. They're not fair. They are a self-inflicted wound that doesn't have to happen," he told workers in Newport News, Virginia.

In a move criticized by Republicans as a dangerous political stunt, the U.S. Immigration and Customs Enforcement agency released several hundred detained illegal immigrants in order to save money in preparation for the cuts.

An agreement in Congress would halt the cuts, but with days to go before the ax starts to fall, the two parties do not agree on what to replace them with. There have been hardly any budget talks between the parties since New Year.

Republicans seek different, more targeted, spending cuts than entailed in "sequestration," as the automatic cuts are known in Washington budget parlance. They complain that Obama is overplaying worries about sequestration to promote long-held plans to close tax loopholes.

House of Representatives Speaker John Boehner accused Obama of using "our military men and women as a prop in yet another campaign rally to support his tax hikes."

Boehner, under pressure by conservatives not to cave to Obama's demand for higher taxes, said members of the Democratic-controlled Senate need to "get off their ass" and pass legislation that would blunt the impact of the cuts.

In the Senate, Republicans struggled to come up with a unified plan for replacing the cuts, with Senate Republican leader Mitch McConnell saying lawmakers should simply pass a law giving the president flexibility on how the reductions would be carried out. Obama rejected that idea.

In a sign of how far they are from halting sequestration, congressional Republicans and the White House have been trying to blame each other for the cuts, which both Democrats and Republicans agreed to in a 2011 plan to fix an earlier budget crisis.

President Obama plans to convene a meeting with the top leaders in Congress on Friday at the White House, congressional aides confirmed.
 
The president’s confab with Boehner (R-Ohio), Senate Majority Leader Harry Reid (D-Nev.), McConnell (R-Ky.) and Minority Leader Nancy Pelosi (D-San Francisco) will come on the day the indiscriminate across-the-board budget cuts, known as the sequester, are set to begin slicing $85 billion in federal spending by the end of September.
 
Republicans on Capitol Hill immediately questioned whether the administration was "serious" about stopping the automatic budget cuts or whether the meeting was a "farce."

BLAME SHARED FOR CUTS

"The president's been running around acting like the world's going to end because Congress might actually follow through on an idea he proposed and signed into law - all the while pretending he's somehow powerless to stop it," said McConnell.

Americans blame both Obama and congressional Republicans for the sequestration crisis, according to a Reuters/Ipsos online poll released on Tuesday.

Twenty-five percent of people said Republicans in Congress were responsible for sequestration, 23 percent blamed Obama and 5 percent pointed to congressional Democrats. Thirty percent said all of them were to blame.

With a trip to a defense-heavy region of the country, Obama is seeking to draw attention to how the cuts would play out in communities where the military is a major source of jobs.

Defense spending makes up 9.8 percent of Virginia's gross domestic product.

But sequestration will be brought in gradually, and no shock to the economy is expected on Friday when it starts.

IMMIGRANTS RELEASED

"The impact of this policy won't be felt overnight but it will be real," Obama said. "The longer these cuts are in place the greater the damage."

The planned cuts will be phased in over seven months, giving lawmakers time to halt the worst effects, possibly in budget talks later in March.

But the Obama administration is highlighting a series of cuts to public services which are threatened.

The release of several hundred illegal immigrants due to budget pressures was criticized by the Republican head of the House Judiciary Committee as a political stunt to pressure Congress to put off sequestration.

"It's abhorrent that President Obama is releasing criminals into our communities to promote his political agenda on sequestration," U.S. Representative Bob Goodlatte said in a statement.

Immigration and Customs Enforcement released the immigrants while their deportation cases proceed. ICE spokeswoman Gillian Christensen said serious offenders were still being held.

Sequestration might be stopped as part of negotiations next month over another unrelated fiscal issue: a continuing resolution to fund government operations.

But House Republicans think they are in a strong bargaining position as there is not likely to be public outcry when the cuts start, unlike the "fiscal cliff" crisis at the New Year when the threat of tax hikes for most working Americans kept pressure on lawmakers to reach a deal.

The sequestration cuts apply in equal measure to non-defense spending and defense spending.

The reductions will force the Pentagon to put most of its 800,000 civilian employees on unpaid leave for 22 days, slash ship and aircraft maintenance and curtail training, Defense Department officials have told Congress. Pentagon contracting and acquisitions personnel were authorized last week to consult with their industry counterparts about the upcoming spending cuts.

Federal Reserve Chairman Ben Bernanke, in testimony on Tuesday to the Senate Banking Committee, urged lawmakers to avoid the spending cuts, warning that combined with earlier tax increases it could create a "significant headwind" for the economic recovery.

 
"The threat of these cuts has already forced the Navy to cancel the deployment, or delay the repair of certain aircraft carriers. One that's currently being built might not get finished," he warned.

The $85 billion across-the-board budget cuts are due to begin on Friday, and might eventually force the government to scale back on a host of services such as air traffic control, law enforcement and food safety inspections.

"These cuts are wrong. They are not smart. They're not fair. They are a self-inflicted wound that doesn't have to happen," he told workers in Newport News, Virginia.

In a move criticized by Republicans as a dangerous political stunt, the U.S. Immigration and Customs Enforcement agency released several hundred detained illegal immigrants in order to save money in preparation for the cuts.

An agreement in Congress would halt the cuts, but with days to go before the ax starts to fall, the two parties do not agree on what to replace them with. There have been hardly any budget talks between the parties since New Year.

Republicans seek different, more targeted, spending cuts than entailed in "sequestration," as the automatic cuts are known in Washington budget parlance. They complain that Obama is overplaying worries about sequestration to promote long-held plans to close tax loopholes.

House of Representatives Speaker John Boehner accused Obama of using "our military men and women as a prop in yet another campaign rally to support his tax hikes."

Boehner, under pressure by conservatives not to cave to Obama's demand for higher taxes, said members of the Democratic-controlled Senate need to "get off their ass" and pass legislation that would blunt the impact of the cuts.

In the Senate, Republicans struggled to come up with a unified plan for replacing the cuts, with Senate Republican leader Mitch McConnell saying lawmakers should simply pass a law giving the president flexibility on how the reductions would be carried out. Obama rejected that idea.

In a sign of how far they are from halting sequestration, congressional Republicans and the White House have been trying to blame each other for the cuts, which both Democrats and Republicans agreed to in a 2011 plan to fix an earlier budget crisis.

BLAME SHARED FOR CUTS

"The president's been running around acting like the world's going to end because Congress might actually follow through on an idea he proposed and signed into law - all the while pretending he's somehow powerless to stop it," said McConnell.

Americans blame both Obama and congressional Republicans for the sequestration crisis, according to a Reuters/Ipsos online poll released on Tuesday.

Twenty-five percent of people said Republicans in Congress were responsible for sequestration, 23 percent blamed Obama and 5 percent pointed to congressional Democrats. Thirty percent said all of them were to blame.

With a trip to a defense-heavy region of the country, Obama is seeking to draw attention to how the cuts would play out in communities where the military is a major source of jobs.

Defense spending makes up 9.8 percent of Virginia's gross domestic product.

But sequestration will be brought in gradually, and no shock to the economy is expected on Friday when it starts.

IMMIGRANTS RELEASED

"The impact of this policy won't be felt overnight but it will be real," Obama said. "The longer these cuts are in place the greater the damage."

The planned cuts will be phased in over seven months, giving lawmakers time to halt the worst effects, possibly in budget talks later in March.

But the Obama administration is highlighting a series of cuts to public services which are threatened.

The release of several hundred illegal immigrants due to budget pressures was criticized by the Republican head of the House Judiciary Committee as a political stunt to pressure Congress to put off sequestration.

"It's abhorrent that President Obama is releasing criminals into our communities to promote his political agenda on sequestration," U.S. Representative Bob Goodlatte said in a statement.

Immigration and Customs Enforcement released the immigrants while their deportation cases proceed. ICE spokeswoman Gillian Christensen said serious offenders were still being held.

Sequestration might be stopped as part of negotiations next month over another unrelated fiscal issue: a continuing resolution to fund government operations.

But House Republicans think they are in a strong bargaining position as there is not likely to be public outcry when the cuts start, unlike the "fiscal cliff" crisis at the New Year when the threat of tax hikes for most working Americans kept pressure on lawmakers to reach a deal.

The sequestration cuts apply in equal measure to non-defense spending and defense spending.

The reductions will force the Pentagon to put most of its 800,000 civilian employees on unpaid leave for 22 days, slash ship and aircraft maintenance and curtail training, Defense Department officials have told Congress. Pentagon contracting and acquisitions personnel were authorized last week to consult with their industry counterparts about the upcoming spending cuts.

Federal Reserve Chairman Ben Bernanke, in testimony on Tuesday to the Senate Banking Committee, urged lawmakers to avoid the spending cuts, warning that combined with earlier tax increases it could create a "significant headwind" for the economic recovery.

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