White House defends offer as 'good faith effort'

 The White House is defending President Barack Obama's proposal to set a higher threshold for tax increases than what he vowed to do during his presidential campaign. The White House says Obama has moved halfway to meet House Speaker John Boehner on a "fiscal cliff" deal that raises $1.2 trillion in tax revenue, down from the $1.6 trillion Obama had initially requested.
White House spokesman Jay Carney says that offering to raise taxes on taxpayers earning more than $400,000 rather than the $200,000 he ran on demonstrates, in Carney's words, Obama's good faith effort to reach a compromise.
The new tax proposal is contained in a broader plan that Obama gave Boehner Monday that would cut spending further and lower cost-of-living increases for most Social Security beneficiaries.

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Factbox: U.S. House "Plan B" tax bill likely to have short shelf life

The U.S. House of Representatives is likely to vote this week on what is being called "Plan B" on avoiding the "fiscal cliff."
The Republican-sponsored legislation aims to extend current low tax rates for most families. Without such action by Congress, across-the-board income tax rates will rise on January 1.
The combination of $500 billion in tax hikes and $100 billion in spending cuts, which are scheduled to start in the new year, could push the U.S. economy into recession, according to experts.
House Speaker John Boehner, the top Republican in Congress, and Democratic President Barack Obama have been trying for weeks to avoid the fiscal cliff with an alternative tax and spending-cut deal. Boehner says he is offering this very limited alternative in case negotiations with Obama fail.
Here are key elements of Boehner's Plan B:
* A House vote is expected on Thursday.
* Boehner expressed confidence on Wednesday that the measure would pass but some House Republican aides were not yet predicting that.
* The White House has said Obama would veto the Boehner Plan B in the unlikely event it made it to his desk.
* Democrats are viewing Plan B as nothing more than a diversion from attempts to reach a broad deficit-reduction deal to avoid the fiscal cliff. They see it as a way for Boehner to give his conservatives a vote on a measure that they can tout as a tax-cut bill for all but the wealthiest and inoculate them against Democratic accusations of obstruction.
* Republicans argue that they are acting responsibly by providing a backstop against massive tax increases in case the Obama-Boehner negotiations fail.
* Once Plan B is dealt with, all attention will shift to whether Obama and Boehner can work out a broad agreement by December 31 or whether the country will go off the cliff. If that happens, there is speculation that some sort of deal might be worked out in the early weeks of January to avoid the full brunt of the tax hikes and spending cuts.
* Under Boehner's Plan B, current low tax rates would be made permanent for families with net annual incomes of up to $1 million. The measure would let tax rates rise on income above $1 million. Without action by Congress, all income tax rates are set to rise on January 1 with the expiration of tax cuts enacted a decade ago by then-President George W. Bush.
* Plan B includes a grab bag of other expiring tax provisions. It would permanently fix the alternative minimum tax so that middle-class taxpayers do not creep into a tax bracket intended for the wealthiest. Annual AMT fixes have prevented tens of millions of households from paying a higher tax rate.
Also included are moves to maintain estate taxes at their current 35 percent rate per individual after a $5 million exemption. The White House backs reverting to the 2009 estate tax levels of 45 percent tax after a $3.5 million exemption per individual, though some moderate Democrats back keeping the current law.
Plan B legislation would raise dividend and capital gains tax rates for those earning $1 million and over to 20 percent, from its current 15 percent for most who pay such taxes. Most Democrats back raising the current 15 percent tax rate on investment income to 20 percent for households earning more than $250,000.
* The Joint Committee on Taxation estimates the plan would reduce U.S. revenues by around $4 trillion over 10 years.
* The plan does not address spending issues, including automatic across-the-board spending cuts also looming at year's end.
* The bill does not address how to resolve a looming stand-off over the government's borrowing authority. The government will need to raise the "debt ceiling" in the next few months to avoid default, and Obama wants higher borrowing authority approved promptly. House Republicans continue to want to hold back and use it as leverage in ongoing fiscal cliff talks, according to aides.
* Senate Majority Leader Harry Reid already has warned there are not the votes in his chamber to pass Boehner's plan. But if the House sent the Senate such a bill, Reid could respond in one of a few ways. He could declare that the Senate in July passed its version of this legislation, but with a $250,000 threshold, and take no further action. Or, he could offer a variation of the Senate-passed bill. Obama has proposed a $400,000 cut-off for maintaining low income tax rates. Reid could embrace that level or another one.
* The legislation is being inserted into an existing bill that originally had to do with Burma trade policy. A House Rules Committee spokesman said this was being done to avoid some potential procedural delays.

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U.S. charges three Swiss bankers in offshore account case

 Three Swiss bankers accused of conspiring with American clients to hide more than $420 million from the tax-collecting U.S. Internal Revenue Service were indicted, the U.S. Attorney's Office in Manhattan said on Wednesday.
The indictment named Stephan Fellmann, Otto Huppi and Christof Reist, all former client advisers with an unnamed Swiss bank. None of the bankers have been arrested, authorities said.
Their attorneys were not immediately known.
The indictment said the unnamed bank did not have offices in the United States.
Banking secrecy is enshrined in Swiss law and tradition, but it has recently come under pressure as the United States and other nations have moved aggressively to tighten tax law enforcement and demanded more openness and cooperation.
In April, two Swiss financial advisers were indicted on U.S. charges of conspiring to help Americans hide $267 million in secret bank accounts.
In January, prosecutors charged three Swiss bankers with conspiring with wealthy taxpayers to hide more than $1.2 billion in assets from tax authorities.
UBS AG, the largest Swiss bank, in 2009 paid a $780 million fine as part of a settlement with U.S. authorities who charged the bank helped thousands of wealthy Americans hide billions of dollars in assets in secret Swiss accounts.

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"Fiscal cliff" turmoil could hit 100 million taxpayers: U.S. IRS

WASHINGTON (Reuters) - U.S. tax authorities warned on Wednesday that as many as 100 million taxpayers - far more than previously estimated - could face refund delays if lawmakers' "fiscal cliff" negotiations fail to fix the alternative minimum tax (AMT) before year-end.
The Internal Revenue Service said in a letter to lawmakers that it was raising its estimate on AMT impact from 60 million.
"It is becoming apparent that an even larger number of taxpayers - 80 to 100 million of the 150 million total returns expected to be filed - may be unable to file," IRS Acting Commissioner Steven Miller wrote.
The AMT is a levy designed to ensure that high-income taxpayers pay a minimum tax. Democrats and Republican typically agree to adjust the tax for inflation to prevent unintended taxpayers from being hit by it.
This year, however, its fate is tied to heated negotiations - primarily between President Barack Obama and House Speaker John Boehner - over future taxes and federal spending as they try to avoid the automatic tax increases and spending cuts known as the fiscal cliff.
The AMT fix for calculating 2012 income tax has broad bipartisan support, but so far been drowned out by the larger federal budget questions.
Without action soon to fix the AMT, there could be "lengthy delays of tax refunds and unexpectedly higher taxes for many taxpayers," Miller said.
The IRS needs congressional authority to update tax-filing software and forms so that Americans can start their tax returns next year. Inaction by Congress on the AMT has left IRS unsure which taxpayers will need to pay the AMT tax.
An IRS spokesman declined to comment on the agency's AMT preparations to date.
"Failure to act on the fiscal cliff will throw the 2013 tax filing season into chaos," Representative Sander Levin, a Michigan Democrat, said in a statement.
About 4 million taxpayers pay the AMT now because Congress routinely "patches" it for inflation to keep it from reaching down into middle-income tax brackets.
Without a patch for 2012, up to 33 million taxpayers will have to pay the AMT, according to IRS.
Obama's most recent offer to Republicans included a permanent AMT patch.
House Republicans plan to vote Thursday on a bill to address the fiscal cliff that also includes an AMT patch.

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What's on the table now in 'fiscal cliff' talks

An update on the latest offers on the table in negotiations to avert a year-end avalanche of federal tax increases and spending cuts known as the "fiscal cliff":
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INCOME TAXES
House Speaker John Boehner would allow income tax rates to rise for people making more than $1 million per year and would hold rates where they are for everyone making less. The top rate on income exceeding $1 million would go from 35 percent to 39.6 percent.
President Barack Obama would freeze income tax rates for taxpayers making $400,000 or less and raise them for people making more.
The two sides are moving closer together. Previously, the Republican House leader opposed allowing any tax rates to go up; Obama wanted higher taxes for individual income above $200,000, or $250,000 for couples.
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PAYROLL TAX
Obama has dropped his proposal to extend a temporary cut in Social Security payroll taxes paid by 163 million workers. Republicans want that tax to go back up.
Raising the payroll tax by 2 percentage points to its old level would cost a worker making $50,000 a year another $1,000 — or a little more than $19 per week — during 2013.
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SOCIAL SECURITY
Obama is offering to reduce cost-of-living increases for Social Security recipients. Republicans have been seeking this as a key to long-term deficit reduction. But many congressional Democrats oppose it.
Government pensions and veterans' benefits would also get smaller cost-of-living increases.
In addition, taxpayers, especially low- and middle-income families, would pay more because of changes in the way that tax brackets are adjusted for inflation.
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MEDICARE
Obama continues to reject Republicans' plan to raise the eligibility age for Medicare from 65 to 67. Boehner now says raising the eligibility age is not essential to a deal.
Obama wants to limit cuts in Medicare and other health care programs to about $400 billion over 10 years; Republicans want to overhaul Medicare to save even more money.
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DEBT LIMIT
Obama wants a deal that would raise the amount the government is allowed to borrow to cover the next two years, to avoid another debt showdown with Congress until after the 2014 midterm elections.
Previously, Obama had demanded permanent authority to increase the debt ceiling without congressional approval. Republicans want Congress to be part of the decision-making process so they can demand budget-cutting in exchange for additional borrowing.
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OTHER TAXES
Obama and Boehner both propose raising taxes on dividends and capital gains from 15 percent to 20 percent.
Both sides would reduce the number of deductions and exemptions that wealthy taxpayers can claim.
Obama would also let estate taxes revert to a 45 percent rate, after the first $3.5 million of an estate is exempted. Boehner backs a plan for a 35 percent rate and $5 million exemption.

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AP source: Dolphins' Smith has knee bruise

A person familiar with the diagnosis says Miami Dolphins cornerback Sean Smith escaped serious injury when he hurt his left knee in the team's victory over Buffalo.
An MRI test Monday determined the injury was only a bruise, the person told The Associated Press, speaking on condition of anonymity because the Dolphins are not releasing details about the injury.
Smith, a fourth-year pro and Miami's best cornerback, can become a free agent this offseason. The Dolphins, who are out of the playoff race, conclude the season Sunday at New England.

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NFL-Pagano joins playoff bound Colts after battle with cancer

 The Indianapolis Colts and their fans got an early Christmas gift when head coach Chuck Pagano returned to work on Monday, three months after being forced to the sidelines to battle cancer.
Diagnosed with leukemia in late September, Pagano spent the last three months undergoing treatment, including chemotherapy, while his inspired team led by rookie quarterback Andrew Luck battled on the field earning an unlikely playoff spot.
"Circumstances don't make you, they reveal you," an emotional Pagano told reporters after reporting for work at the teams Indianapolis training facility. "The way I look at it is, my job has just begun.
"Besides my job here...my job now is to give back everything I can possibly give back to everyone out there who's fighting some type of illness, some type of disease, some type of cancer."
The Colts, who tied for the NFL's worst record last season at 2-14, improved to 10-5 with their win over the Kansas City Chiefs on Sunday clinching an AFC wild card.
After three games into a rebuilding season, the Colts learned Pagano would take indefinite leave to fight his cancer and was replaced by assistant coach and offensive coordinator Bruce Arians.
The goal of the Colts became to keep playing until Pagano could return to work.
Indianapolis went 9-3 under Arians, who will hand over the head coaching job back to Pagano for the regular season finale this Sunday against the Houston Texans.
"It's a fairy tale," said Colts owner Jim Irsay. "It's a Hollywood script. But it's real

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Pagano back to coach Colts after cancer treatment

 Chuck Pagano stepped to the podium Monday, hugged his team owner, thanked his family for its support and wiped a tear from his eye.
He might, finally, turn out the lights in his office, too.
Nearly three months to the day after being diagnosed with leukemia, the Colts' first-year coach returned to a team eager to reunite with a boss healthy enough to go back to work.
"I told you my best day of my life was July 1, 1989," Pagano said, referring to his wedding date. "Today was No. 2. Getting to pull up, drive in, get out of my car, the key fob still worked. I was beginning to question whether it would or not. When I asked for Bruce to take over, I asked for him to kick some you-know-what and to do great. Damn Bruce, you had to go and win nine games? Tough act to follow. Tough act to follow. Best in the history of the NFL. That's what I have to come back to."
The comment turned tears into the laughter everyone expected on such a festive occasion.
For Pagano and the Colts, Monday morning was as precious as anyone could have imagined when Pagano took an indefinite leave to face the biggest opponent of his life, cancer.
In his absence, all the Colts was win nine of 12 games, make a historic turnaround and clinch a playoff spot all before Sunday's regular-season finale against Houston, which they pegged as the day they hoped to have Pagano back. If all goes well at practice this week, Pagano will be on the sideline for the first time since a Week 3 loss to Jacksonville.
Pagano endured three rounds of chemotherapy to put his cancer in remission.
That Pagano's return came less than 24 hours after Indy (10-5) locked up the No. 5 seed in the AFC and the day before Christmas seemed fitting, too.
"I know Chuck is ready for this challenge. In speaking to his doctor multiple times, I know that the time is right for him to grab the reins, get the head coaching cap on and begin the journey," owner Jim Irsay said. "It's been a miraculous story. It really is a book. It's a fairytale. It's a Hollywood script. It's all those things but it's real."
The reality is that he's returning to a vastly different team than the one he turned over to Arians, his long-time friend and first assistant coaching hire.
Back then, the Colts were 1-2 and most of the so-called experts had written them off as one of the league's worst teams. Now, they're ready to show the football world that they can be just as successful under Pagano as they were under Arians, who tied the NFL record for wins after a midseason coaching change.
Pagano also has changed.
The neatly-trimmed salt-and-pepper hair and trademark goatee that were missing in November have slowly returned, and the thinner man who appeared to be catching his breath during a postgame speech in early November, looked and sounded as good as ever Monday.
He repeatedly thanked fans for their prayers and letters, the organization and his family for their unwavering help and promised to provide comfort and support to other people who are facing similar fights. During one poignant moment that nearly brought out tears again, Pagano even recounted a letter sent to him by a 9-year-old child who suggested he suck on ice chips and strawberry Popsicles in the hospital and advised him to be nice to the nurses regardless of how he felt — and he never even paused.
"I feel great, my weight is back, my energy is back and again, it's just a blessing to be back here," Pagano said.
In the minds of Colts players and coaches, Pagano never really left.
He continually watched practice tape and game film on his computer, used phone calls and text messages to regularly communicate with players and occasionally delivered a pregame or postgame speech to his team.
"He texted me and called me so much, it was like he was standing there in my face every day," said receiver Reggie Wayne, who has been friends with Pagano since the two were working together at the University of Miami.
But the Colts found plenty of other ways to keep Pagano's battle in the forefront.
They began a fundraising campaign for leukemia research, calling it Chuckstrong. Players had stickers with the initials CP on their locker room nameplates, and Arians wore an orange ribbon on his baseball cap during games. Orange is the symbolic color for leukemia. At one point, nearly three dozen players shaved their heads to show their ailing coach they were with him.
That's not all.
Arians and first-year general manager Ryan Grigson decided to leave the lights on in Pagano's office until he returned. Pagano noted the team even installed plastic clips to make sure those lights were not mistakenly turned off while he was gone. Those clips were removed when Pagano arrived Monday morning.
And Arians said nobody sat in the front seat of the team bus.
"He's always been our head coach," Arians said.
So after getting medical clearance from his oncologist, Dr. Larry Cripe, to return with no restrictions, Pagano couldn't wait to get to the office Monday morning.
Arians arrived at 7 a.m., three hours early for the scheduled team meeting. By then, Pagano had already driven past the inflatable Colts player with the words "Welcome Back Chuck" printed on its chest and was back in his office preparing for the Texans.
Players showed up a couple of hours later, and when the torch was passed from Arians back to Pagano, players gave their returning coach a standing ovation that Wayne said was well-deserved.
All Pagano wants to do now is emulate the success Arians and his players have had this season.
"I asked him (Arians) if he would lead this team and this ballclub and this organization and take over the reins," Pagano said. "What a masterful, masterful job you did Bruce. You carried the torch and all you went out and did was win nine ballgames. You got us our 10th win yesterday and you got us into the playoffs. You did it with dignity and you did it with class. You're everything that I always knew you were and more."

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Pagano joins playoff bound Colts after battle with cancer

The Indianapolis Colts and their fans got an early Christmas gift when head coach Chuck Pagano returned to work on Monday, three months after being forced to the sidelines to battle cancer.
Diagnosed with leukemia in late September, Pagano spent the last three months undergoing treatment, including chemotherapy, while his inspired team led by rookie quarterback Andrew Luck battled on the field earning an unlikely playoff spot.
"Circumstances don't make you, they reveal you," an emotional Pagano told reporters after reporting for work at the teams Indianapolis training facility. "The way I look at it is, my job has just begun.
"Besides my job here...my job now is to give back everything I can possibly give back to everyone out there who's fighting some type of illness, some type of disease, some type of cancer."
The Colts, who tied for the NFL's worst record last season at 2-14, improved to 10-5 with their win over the Kansas City Chiefs on Sunday clinching an AFC wild card.
After three games into a rebuilding season, the Colts learned Pagano would take indefinite leave to fight his cancer and was replaced by assistant coach and offensive coordinator Bruce Arians.
The goal of the Colts became to keep playing until Pagano could return to work.
Indianapolis went 9-3 under Arians, who will hand over the head coaching job back to Pagano for the regular season finale this Sunday against the Houston Texans.
"It's a fairy tale," said Colts owner Jim Irsay. "It's a Hollywood script. But it's real." 0

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Ryan says Tebow would have done wildcat if asked

 Tim Tebow would have done whatever Rex Ryan asked — if the New York Jets coach had asked him.
Ryan acknowledged Monday that Tebow wasn't happy when the coach chose Greg McElroy to start for the benched Mark Sanchez, but insisted Tebow was willing to play in any role Sunday against San Diego — including the wildcat.
"He was disappointed, there's no question," Ryan said Monday. "He was disappointed that he was not named the starter, but with that being said, I'm not going to get into private conversations that I have with players, but it was my decision to use Jeremy Kerley in the wildcat, without question.
"But I'll say this: I believe if Tim's number was called, he would've went in and played. I don't think there's any doubt about that."
A person familiar with the situation told The Associated Press that Tebow asked out of his wildcat offense duties last week after hearing that McElroy, the third-stringer, would get his first NFL start over Tebow, listed as the No. 2 quarterback.
Another person, also familiar with the situation, said that wildcat plays involving Kerley instead of Tebow were added before practice last Wednesday.
Both people spoke on condition of anonymity because the Jets do not disclose personnel discussions.
ESPN New York first reported that Tebow opted out of running wildcat plays. ESPN also reported that Tebow said his relationship with Ryan was "strained" for a few days, but they smoothed things over. Ryan had all three quarterbacks active for Sunday's 27-17 loss, but Tebow never got onto the field in any capacity.
Ryan did not deny that Tebow asked out of running wildcat plays, but also refused to go into any details of what happened.
"I've been transparent and all that stuff without question, but I'm not going to give you a private conversation that I would have with a player," Ryan reiterated. "That's between him and I. If he wants to share whatever the conversation is, Tim or anybody else, then that's up to him."
Ryan was also asked if it could be considered "insubordination" if a player refuses to play in a role designed for him.
"You guys are assuming something's a fact or whatever, and that's fine," Ryan said. "If I would have asked Tim to play in anything, Tim would have gone into the game and done that."
After the game, Tebow would say only that "it just happened" that he didn't play in the wildcat package. He has done his best to hide his frustration throughout what he could consider a lost year on the playing field.
"Well, it's been disappointing," Tebow said of the season. "Obviously, it didn't go as we thought, as I had hoped, but sometimes in life you have that. Sometimes you have setbacks and you just have to look at them as another opportunity for you to step back up and keep working and figure out what to do."
New York will either trade or release Tebow after the season, a disappointing and frustrating one-year stint with the Jets that just seems to get worse. Tebow was asked after the game if he could remember the last time he had played so little.
"Three or 4 years old, probably," Tebow said. "Since I started."
Tebow has not played a single snap in four of the last five games, although some of that inactivity was due to him breaking two ribs at Seattle on Nov. 11. He has been cleared to play, and got a full offensive series at quarterback last Monday night at Tennessee, but Ryan confirmed that Tebow "still has two cracked ribs."
The Jets (6-9) were eliminated last week with their loss to the Titans, and Ryan announced after the game against San Diego that McElroy — despite being sacked 11 times — would start in the season finale at Buffalo. Whether Tebow actually plays in that game or has taken his last snap with the Jets remains to be seen.
Tebow was acquired from Denver in a stunning trade last March and expected to be a major contributor to the offense. He has been only a role player — whenever he actually plays.
"I thought we'd do some better things out of that wildcat," Ryan said. "It hasn't happened. I'm not blaming it on Tim Tebow. I'm sure there's multiple reasons, but for whatever reason, it has not had the results that I envisioned for it."
Some reports have Jacksonville interested in bringing Tebow in to compete for its quarterback job next season. The Jaguars were the only team other than the Jets that tried to trade for Tebow last year, plus it would be a homecoming for Tebow if he played in Jacksonville.
"I'm not pulling the tampering thing," Ryan said. "Tim's under contract with us and that's all I know."
Jaguars coach Mike Mularkey told Jacksonville reporters that he wasn't aware of reports that his team looked into pursuing Tebow before the trade deadline earlier this season.
"I am not going to talk about that," he added. "I don't talk about other players on other teams right now."
NOTES: Ryan was still disgusted by how many times McElroy was sacked by the Chargers on Sunday. "The 11 sacks and all that, that's as poor as I can ever remember as far as the pass protection was concerned," he said. It was the most a Jets QB was sacked since David Norrie in 1987 against Dallas — a game played by replacements. ... The Jets waived WR Mardy Gilyard, who had two catches for 15 yards in three games for New York.

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