Boehner says Obama pushing U.S. toward "fiscal cliff"

WASHINGTON (Reuters) - Republican House Speaker John Boehner accused President Barack Obama of pushing the country toward the "fiscal cliff" on Friday and of wasting another week without making progress in talks.

With three weeks left before a combination of steep tax hikes and deep spending cuts kicks in unless Congress intervenes, Boehner said the administration had adopted a "my way or the highway" approach and was engaging in reckless talk about going over the cliff.

"This isn't a progress report because there is no progress to report," Boehner told reporters at the Capitol. "The president has adopted a deliberate strategy to slow-walk our economy right to the edge of the fiscal cliff."

The day's rhetoric did point the way to a possible compromise that has been discussed for weeks on the main sticking point, tax hikes for the wealthy.

While Obama wants tax rates raised to 39.6 percent from 35 percent, he has not ruled out a smaller increase, perhaps to 37 percent. On Friday, Boehner, House Minority Leader Nancy Pelosi and Vice President Joe Biden indicated flexibility on the "37 percent solution."

Biden was most explicit, saying that raising the rate was "not a negotiable issue; theoretically we can negotiate how far up."

"There are a lot of things that are possible to put the revenue that the president seeks on the table," Boehner said when asked about the same thing.

Pelosi, questioned later about Boehner's remark, said, "It's not about the rate, it's about the money."

But the bleak report from Boehner prolonged the economic uncertainty surrounding the fiscal cliff, which has already riled markets, slowed down business decisions and disrupted the budgeting processes for government at all levels across the country.

Economists say going over the cliff could throw the economy back into a recession.

Obama has called for extending the tax cuts set to expire on December 31 for middle-class taxpayers, but letting them rise for the wealthiest 2 percent of Americans. Boehner and Republicans oppose his plan, preferring to find new revenues by closing loopholes and reducing deductions.

Boehner characterized as "reckless talk" Treasury Secretary Timothy Geithner's comment this week that the administration was prepared to go over the cliff if tax rates for the wealthiest were not increased.

The downbeat assessment was in line with what Boehner has offered for weeks as the two sides hold their ground on Obama's call for raising tax rates and Republican calls for cuts in entitlements like the Medicare and Medicaid healthcare programs for seniors and the poor.

Congressional aides said there were no plans for meetings on the issue this weekend. Future talks will be limited to Boehner and Obama and their staffs as the deadline approached, aides said.

Boehner said his telephone conversation with Obama on Wednesday and renewed staff talks on Thursday had not made any progress.

'MORE OF THE SAME'

"The phone call was pleasant, but it was just more of the same. Even the conversations the staff had yesterday were just more of the same. It's time for the president, if he's serious, to come back to us with a counteroffer," Boehner said.

Boehner and the House of Representatives leadership submitted their terms for a deal to the White House on Monday, after Obama offered his opening proposal last week.

The plans from both sides would cut deficits by more than $4 trillion over the next 10 years but differ on how to get there. Republicans want more drastic spending cuts in entitlement programs, while Obama wants to raise more revenue with tax increases and to boost some spending to spur the sluggish economy.

With polling showing most Americans would blame Republicans if the country goes off the cliff, more House Republicans have been urging Boehner to get an agreement quickly, even if it means tax hikes for the wealthiest.

But Boehner could have a challenge selling an eventual agreement to conservative Tea Party sympathizers in the House, some of whom are openly critical of the concessions the speaker has already made.

Boehner has been under fire from the right for proposing $800 billion in new revenue and for removing from House committees four conservative Republican lawmakers who were seen as bucking the leadership.

"When he couples this conservative purging with a negotiated tax increase of $800 billion, we are starting to see more and more signs that he's not dedicated to fiscally conservative beliefs," Andrew Roth of the influential anti-tax group Club for Growth told Fox News.

If the question of whether to raise tax rates is resolved, the two sides will then try to figure out a way to deal with the spending cuts, perhaps postponing or trimming them. They will also work toward a longer-term deficit-reduction package to be taken up after the new Congress is sworn in next month.

At a news conference on Friday, Pelosi threw her support behind a White House proposal to give Obama power to raise U.S. borrowing authority without legislation from Congress.

The debt ceiling issue, which provoked a 2011 showdown that led to a downgrade of the U.S. credit rating, has become entwined in the fiscal cliff debate. The debt limit will need to be raised in the next few months.

"The White House and House Democrats are on the same page on the debt ceiling," Pelosi said.

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Roche breast cancer drug extends overall survival

ZURICH (Reuters) - Swiss pharma group Roche's drug Perjeta significantly extended the lives of women with an aggressive and incurable form of breast cancer compared to a placebo, according to new data from a late-stage study presented on Saturday.

The detailed data presented at the San Antonio Breast Cancer Symposium found that the risk of death was reduced by 34 percent in women treated with a combination treatment of the drugs Perjeta and Herceptin plus chemotherapy compared to women treated with Herceptin, chemotherapy and a placebo, Roche said.

Roche is hoping that the Perjeta combination will become the standard treatment for women with a form of cancer known as HER2-positive, which makes up about a quarter of all breast cancers and has no cure.

At the time of the analysis, median overall survival had not yet been reached in people receiving the Perjeta combination, as more than half of these people continued to survive, Roche said.

Median overall survival was more than three years for people who received Herceptin and chemotherapy, Roche said, adding no new safety signals had been observed in the phase III study.

"This treatment combination with Perjeta is the first to have significantly extended survival compared to Herceptin and chemotherapy in people with previously untreated HER2-positive metastatic breast cancer," Roche's Chief Medical Officer Hal Barron said in the statement.

Breast cancer is the most common cancer among women worldwide, with about 1.4 million new cases diagnosed each year and more than 450,000 women dying of the disease annually, according to the World Health Organisation.

Perjeta, also known as pertuzumab, is a personalized medicine that targets a protein found in high quantities on the outside of cancer cells in HER2-positive cancers.

It was granted approval by U.S. health regulators in June. Roche is awaiting a decision from European regulators.

Vontobel analyst Andrew Weiss forecasts peak sales of 2 billion Swiss francs ($2.15 billion) for the drug.

Roche is also developing an "armed antibody" known as TDM-1 as a treatment for HER2-positive breast cancer. TDM-1 combines Herceptin with a derivative of a powerful type of chemotherapy and is designed to reduce unpleasant side effects. ($1 = 0.9313 Swiss francs)

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Cold Remedy Cocktails: Do They Work?

When it comes to adding a shot of alcohol to your cold or flu remedy, it’s hard not to wish those boozy concoctions are doing some good for your health.  As it turns out, they are.

Well, kinda.

Drinks like hot toddies, which traditionally contain whiskey, lemon and honey, can actually give cold and flu patients relief from their symptoms, said Dr. William Schaffner, chair of preventive medicine at Vanderbilt University Medical Center in Nashville, Tenn.

It just can’t prevent or cure a cold or flu virus.

“It would not have an effect on the virus itself, but its effect on the body can possibly give you some modest symptom relief,” Schaffner said. “The alcohol dilates blood vessels a little bit, and that makes it easier for your mucus membranes to deal with the infection.”

Since Sept. 30, more than 5,100 influenza cases have been reported to the Centers for Disease Control and Prevention, including 40 cases of H1N1.

Click here to read about how flu has little to do with cold weather.

Schaffner said warm moisture from a steaming mug of any beverage can offer symptom relief.

“That’s part of why chicken soup is thought to work,” he said.

Any liquid is good, but people drinking spiked remedies need to be sure they’re also keeping up their nonalcoholic fluids, Schaffner said. Alcohol, coffee and tea are diuretics, meaning they cause kidneys to get rid of fluid faster than they usually do.  Schaffner recommends supplementing that flu cocktail with water and fruit juice (as long as it’s not too sugary).

A Japanese study this week found that an ingredient in beer can curb the respiratory syncytial virus, which causes cold- and flu-like symptoms, according to The Associated Press. The study, funded by Sapporo Breweries, found that humulone, a chemical in hops,  can fight viruses. However, someone would have to drink 30 12-ounce cans of beer for it to work.

“We would not recommend going out and drinking 30 bottles of beer every day to ward off the flu,” Schaffner said. “Better to get vaccinated.”

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Booze, smokes on agenda for quirky gov't group

BELTSVILLE, Md. (AP) — Deep in a secure laboratory just outside Washington sits the federal government's heaviest smoker.

It is a half-ton hulk of a machine, all brushed aluminum and gasping smoke holes, like a retrofit of equipment used on an Industrial Revolution production line. It can smoke 20 cigarettes at once and conclude which are unsafe because they are counterfeit and which are unsafe merely because they are cigarettes.

Down the hall, a chemist tests shiny flecks from a bottle of Goldschlager, the spicy cinnamon schnapps, to make sure they're real gold. A government agent was sent out to stores to buy it and hundreds of other alcoholic drinks randomly chosen for analysis.

Back at headquarters in downtown Washington, a staffer prepares for a meeting of the Tequila Working Group — a committee created to mollify Mexico and keep bulk tequila flowing north across the border.

These are the proud scientists, rule-makers and trade ambassadors of the Alcohol and Tobacco Tax and Trade Bureau, one of the federal government's least-known and most peculiar corners.

The bureau, known as TTB, collects taxes on booze and smokes and tells the companies that produce them how to do business — from approving beer can labels to deciding how much air a gin bottle can contain between lid and liquor.

It decides which valleys in Oregon and California can slap their names on wine labels, what grapes can go into wine and which new alcoholic drinks are safe to import.

The bureau is one example of the specialized government offices threatened by Washington's current zeal for cost-cutting. Obama administration officials weighed eliminating it during the fiscal stalemate of 2011, according to news reports at the time. Its officials were called to the White House budget office to justify their existence — or risk having their duties split between the Internal Revenue Service and the Food and Drug Administration.

The White House ultimately left the bureau's $100 million budget in place for this year — perhaps because it spends far less money to collect each tax dollar than its counterpart, the IRS. But officials there remain hyper-aware of their vulnerability as Republicans and Democrats look to squeeze savings from unlikely places.

If they look closely, the belt-tighteners will discover an agency whose responsibilities often appear to conflict — a regulator that protects its industry from rules it deems unfair, a tax collector that sometimes cuts its companies a break.

Some of its decisions are open to negotiation. A tequila-like liquor with a scorpion floating in it made scientists balk until the producer convinced them that the scorpions are farm-raised and non-toxic.

In other words, this may be the only federal agency that responds favorably to receiving scorpion candy in the mail — an edible tool for persuading scientists that the arthropods were fit for human consumption.

If labs, rules and taxes weren't enough for the bureau's 500-odd employees, they also have law enforcement authority. TTB investigators can send people to jail for things like removing alcohol from the production line and reselling it before it has been taxed by authorities.

With all these responsibilities, it's no surprise the agency's priorities sometimes clash. The bureau gives companies a wide berth on some rules and taxes, officials and experts say, mainly because of its small size and history of collaborating with business. It has granted millions in tax givebacks because of concerns that companies will sue and tie up government resources.

"Because we're regulated by such a friendly agency, and because enforcement isn't huge, there's a level of non-compliance that's sort of acceptable," says Rachel Dumas Rey, president of Compli, a California company that helps wineries comply with Treasury policy.

Agency officials say they use scant resources where they can make the most difference, generally on the biggest producers or companies where there is an indication of wrongdoing.

Yet last July, the bureau slashed a tax bill for the multinational agribusiness conglomerate Cargill from $839,370 to $63,000. Cargill failed to report or pay taxes on about 23,000 gallons of nearly pure industrial alcohol that leaked from a rail car, violating several U.S. laws, according to documents on the bureau's website.

Since 2010, under similar deals with alcohol and tobacco companies, the agency has forgiven more than $25.4 million; the total amount is unclear because some public documents do not list the size of the tax bill or penalty that is being reduced. Nine companies persuaded the agency to slash their bills by more than 95 percent, including Procter & Gamble's Olay subsidiary, which uses alcohol in its skin care products.

Tom Hogue, a spokesman for the bureau and former explosives inspector, says it only agrees to reduce companies' tax bills "if we are satisfied that the (remaining) penalty is commensurate with the violation and is sufficient to deter future illegal conduct." In cases where settlements are granted, Hogue says, "they allow us to use our resources to counter non-compliance, instead of tying them up in court."

When the alcohol and tobacco bureau was split from the Bureau of Alcohol, Tobacco and Firearms, it held on to the former agency's tax collection duties, including for firearms and ammunition. It's still the government's third-biggest revenue collector, after the IRS and Customs and Border Protection. It took in $23.5 billion in federal taxes on alcohol, tobacco, weapons and ammo in the fiscal year ended Sept. 30, 2011, the most recent data available. That amounts to $468 for every dollar the agency spent collecting taxes — more than twice the IRS' ratio, officials note.

The bureau also works with government trade officials to protect and expand international markets for American alcohol and tobacco. Its expertise is crucial in negotiating with Europeans about wine labeling, or standing up to countries that refuse to recognize American "straight bourbon" for what the government says it is: corn whiskey stored in charred new oak containers for at least two years.

In this role, the agency has come to the rescue over the years of whiskey lovers in China, Colombia and Brazil. Those countries' governments tried to ban booze containing too much fusel alcohol, the pungent byproduct of fermentation that gives some whiskey its spicy, solvent-like aroma. Working through international trade groups, armed with data from TTB scientists, U.S. officials spent years convincing them to reverse their policies and allow the importation of whiskey that meets American standards. That was a win for American alcohol producers.

Sometimes, to protect U.S. producers, the bureau erects trade barriers of its own. Under a proposal by the bureau last spring, anything labeled Pisco must have originated in Chile and Peru. (Pisco is a South American grape brandy whose signature cocktail, the Pisco Sour, is so celebrated that it has its own official Peruvian holiday.)

Aspiring Pisco producers in Bolivia, in the U.S. government's eyes, can take a hike.

This is no accident: It's the result of a trade agreement that compels Chile and Peru, in exchange for the Pisco rule, to make sure any bourbon sold there is from the U.S. and meets this country's standards.

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The U.S. is the only nation with an alcohol regulator based in its Treasury Department. Treasury was the federal government's monitor of products seen as sinful or illicit even before Prohibition began in 1919.

When the government first tried to crack down on cocaine and heroin in 1914, it did so by enacting steep taxes. For a time, marijuana also was controlled by imposing taxes so high, it was hoped, that people might lose interest.

After Prohibition was repealed in 1933, the government tried to keep a handle on the alcohol industry by writing production standards for alcohol directly into the tax code. That's where wine's alcohol content is limited to 24 percent.

The government uses taxes to control social phenomena, explains Bill Foster, who ran the bureau's headquarters before retiring this summer.

"Tobacco and alcohol are two of those commodities," Foster says.

The taxes are collected directly from producers and manufacturers, which pass those costs along to consumers. Liquor producers generally pay a flat rate of $13.50 per proof gallon — a gallon of liquid that is one-half alcohol by volume. Small cigars and cigarettes are taxed at a rate of $50.33 per 1,000 sticks.

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The current Alcohol Tobacco Tax and Trade Bureau was split from the Bureau of Alcohol, Tobacco and Firearms in 2003. ATF was moved to the Justice Department, where it focuses on firearms, explosives and violent crime.

Officials who regulate and tax alcohol and tobacco remained at Treasury, where they continue to ensure that wine doesn't contain pesticides and absinthe is free of thujone, the psychoactive ingredient — now banned — that gave it its hallucinogenic reputation.

That's how Dr. Abdul Mabud found himself overseeing 26 chemists at a lab in Beltsville, Md., that tests hundreds of bottles, cigarettes and perfumes every year.

One afternoon, Mabud holds aloft a jar of pure, clear alcohol containing a coiled king cobra, its hood flared and forked tongue extended. Surrounding it are smaller green snakes that appear to be biting each other's tails.

The snake liquor was submitted for consideration as an import from east Asia, where snakes are believed to increase virility.

"With that much snake in there, it's probably not a beverage," Mabud says, explaining why the shelves of America's liquor stores and supermarkets are free of giant, gin-soaked snakes.

Mabud traces his lab's history to 1886, when Congress passed steep taxes on margarine — at the time, an upstart competitor to the nation's dairy products. The 1886 law aimed to prevent crooked margarine-pushers from selling their product as butter. Treasury's first food-quality lab was set up to preserve butter's integrity.

Today, the bureau owns some of the most sophisticated equipment available, including the smoking machine, which can be set to inhale in at least three ways, depending on how long and hard the smoker being simulated prefers to puff: light, medium and Canadian. The last one is when the perforations around the cigarette's filter are blocked and the machine takes bigger, more frequent puffs. It was invented by the Canadian government, and does not necessarily reflect the actual smoking habits of Canadians, says Dawit Bezabeh, chief of the bureau's tobacco lab.

"That's the worst-case scenario," he says.

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Officials are less chatty about a third agency priority: The diplomatically sensitive work of promoting the international alcohol and tobacco trade.

The bureau helps strike deals with other countries that have liquor industries, like the one with Peru and Chile over Pisco. The idea is to protect U.S. alcohol and tobacco producers from unfair competition. Jim Beam's prices might be easily undercut, for example, if an overseas firm was allowed to label something as bourbon even though it was aged in a cask that is neither charred nor oak nor new.

That's how the Tequila Working Group was born. Citing safety concerns, Mexico had threatened to stop exporting bulk tequila — a commodity that supports 500 U.S. bottling jobs. After the bureau agreed in 2006 to regular meetings with Mexico's tequila industry, Mexico backed down. The jobs were saved.

Until the early 2000s, the U.S. negotiated wine-making standards as part of a European wine trade group. As the American wine industry blossomed, officials began to believe that the group was favoring European wineries, for example, by refusing to endorse American agricultural methods. Every member of the group had veto power, and France was willing to use it.

The U.S. escaped Europe's dominance by joining with other oenological up-and-comers like Australia, Argentina, Canada, Chile, New Zealand and South Africa to form the World Wine Trade Group. The group encourages countries to accept each other's wine-making methods.

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Its complicated history helps explain why the bureau looks and acts different from most government offices. As a tax-collecting agency, it wants to see its industries thrive. As a consumer-protection outfit tasked with keeping antifreeze-spiked wine off the market, the bureau must rein in dangerous, sloppy practices by industry members.

If other government agencies ran that way, the Consumer Product Safety Commission would be promoting U.S. baby crib makers at the same time it evaluated their products as potential death traps.

"There's some peril with that kind of approach," says Jeff Bumgarner, a professor of criminal justice at the University of Minnesota who studies the history of federal law enforcement. "The trade part of your mission is one of support and standing up the industries, and the tax collection part and the regulatory part and the compliance part is one of holding those industries in check."

That basic conflict leaves the U.S. government with an alcohol regulator that recently hosted industry executives at conferences to educate them about the bureau's rules and encourage "voluntary compliance," then months later raided a Native American reservation that was suspected of harboring cigarette tax evaders.

Critics say the bureau's close relationship with industry makes it less likely to take a hard line against violators.

Foster sees it another way. He says agents and officials like him are more effective overseers of the industry because they started out working on the distillery floor, measuring batches of liquor and handing producers their tax bills.

"It gave us all a significant understanding of how the industry operates and what their challenges were," he says.

Agency officials say they are making the most of limited resources, and doing better than most federal departments. And their workload is increasing steadily. The alcohol and tobacco bureau is responsible, for example, for approving every label to be used on an alcohol product in the U.S. As the number of microbrewers and microdistilleries explodes, the work of reviewing those labels is becoming a heavier lift.

The bureau now regulates more than 56,000 companies, an increase of 27 percent since 2007. In that time, its core budget rose only 8 percent.

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S.Africa's Mandela admitted to hospital for tests

JOHANNESBURG (Reuters) - Former South African president Nelson Mandela was admitted to hospital on Saturday for medical tests, although the government said there was no cause for alarm.

A statement from President Jacob Zuma's office gave no details of the condition of the 94-year-old anti-apartheid leader.

"Former President Mandela will receive medical attention from time to time which is consistent with his age," the statement said.

"President Zuma assures all that Madiba is doing well and there is no cause for alarm," it added, referring to Mandela by his clan name.

Mandela, who became South Africa's first black president after the country's first all-race elections in 1994, was admitted to hospital in February because of abdominal pain but released the following day after a keyhole examination showed there was nothing seriously wrong with him.

He has since spent most of his time in his ancestral home in Qunu, a village in the impoverished Eastern Cape province.

His frail health prevents him from making any public appearances in South Africa, although in the last few months he has continued to receive high-profile visitors, including former U.S. President Bill Clinton.

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Former South Africa president Mandela admitted to the hospital

JOHANNESBURG (Reuters) - Former South African president Nelson Mandela was admitted to hospital on Saturday for medical tests, although the government said there was no cause for alarm.

A statement from President Jacob Zuma's office gave no details of the condition of the 94-year-old anti-apartheid leader.

"Former President Mandela will receive medical attention from time to time which is consistent with his age," the statement said.

"President Zuma assures all that Madiba is doing well and there is no cause for alarm," it added, referring to Mandela by his clan name.

Mandela, who became South Africa's first black president after the country's first all-race elections in 1994, was admitted to hospital in February because of abdominal pain but released the following day after a keyhole examination showed there was nothing seriously wrong with him.

He has since spent most of his time in his ancestral home in Qunu, a village in the impoverished Eastern Cape province.

His frail health prevents him from making any public appearances in South Africa, although in the last few months he has continued to receive high-profile visitors, including former U.S. President Bill Clinton.

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