Foreign investors major force behind deal

Take a guess. Which of these put more pressure on US lawmakers to strike a deal and avoid the “fiscal cliff” – voters or global financial markets?

If you picked markets, you may be right.

On the day after the last-minute agreement, an uptick in global stock prices seemed far more welcome in Washington than the reaction of voters. The reason is that foreign creditors to the US Treasury had been near a tipping point in wanting their money back, possibly forcing a crisis for US debt.

Investors worldwide now demand the US government display more stability and trust. Globalization has given them a big say in the policy logjams of many countries, and the United States is not immune. Its lingering disputes over issues like taxes and spending have become a prime indicator of its ability to remain innovative, reliable, and productive.

MONITOR'S VIEW: Why American can 'make stuff' again

Elections do have consequences, for sure. But today so does a country’s economic competitiveness, measured in part by its level of dependability, openness, and flexibility in governance. On those sorts of attributes, the US needs work. Consider these latest rankings:

On a global index of innovation, the US has dropped from No. 1 in 2007 to 10th. On economic competitiveness, it has dropped to seventh in the last few years. And compared with other countries, the trust by Americans in their government ranks 54th.

The greatest weakness of the US is seen in its lack of macroeconomic stability. On that measure it fell last year from 90th to 111th.

Economic freedom in the US has been falling and now ranks 10th – behind even the African country of Mauritius. It ranks fifth in the ease of doing business, according to the World Bank.

In 2012, the US fell from the top tier of a “global prosperity index,” which measures such nonmaterial factors as entrepreneurship, safety, education, and governance. It now ranks 12th.

Within two decades, China is expected to have as many college graduates as the entire workforce in the US. The number of Chinese universities in the world’s top 500 has risen from 12 to 22 in just eight years.

The US must compete much more aggressively for foreign investment even as the flow of those investments has declined. Last year, the US was no longer the No. 1 destination for foreign investments. China beat it out.

MONITOR'S VIEW: From DARPA to Google, the search for innovation

Policy disputes over entitlements and taxes are important, but resolving them is even more important if the US is to enjoy a healthy economy. Lawmakers who fight over how to divide up the economic pie must, at some point, collectively agree on how to expand the pie. Prolonged bickering doesn’t do that.

The rest of the world still looks to the US economy as one of the most stable, open, innovative, and competitive places to invest. The limited fiscal-cliff deal shows some political ability to build on those qualities. Investors, as much as voters, demand more – and, when it comes to dealmaking, they may even have more influence.

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Pakistan: Gunmen kill 7 teachers, aid workers

ISLAMABAD (AP) — Gunmen on motorcycles sprayed a van carrying employees from a community center with bullets Tuesday, killing five female teachers and two aid workers, but sparing a child they took out of the vehicle before opening fire.

The director of the group that the seven worked for says he suspects it may have been the latest in a series of attacks targeting anti-polio efforts in Pakistan. Some militants oppose the vaccination campaigns, accusing health workers of acting as spies for the U.S. and alleging the vaccine is intended to make Muslim children sterile.

Last month, nine people working on an anti-polio vaccination campaign were shot and killed. Four of those shootings were in the northwest where Tuesday's attack took place.

The attack was another reminder of the risks to women educators and aid workers from Islamic militants who oppose their work. It was in the same conservative province where militants shot and seriously wounded 15-year-old Malala Yousufzai, an outspoken young activist for girls' education, in October.

There was no immediate claim of responsibility for the latest shootings.

The teachers and health workers — one man and one woman — were killed in Khyber Pakhtunkhwa province on their way home from a community center in the town of Swabi where they were employed at a medical clinic and primary school. Their driver was also injured.

Javed Akhtar, the director of Support With Working Solution, said the medical clinic vaccinated children against polio, and many of the NGO's staff had taken part in immunization campaigns.

Militants in the province have blown up schools and killed female educators. They have also kidnapped and killed aid workers, viewing them as promoting a foreign, liberal agenda.

Khyber Pakhtunkhwa province, formerly called the Northwest Frontier province, borders the tribal areas of Pakistan along the frontier with Afghanistan to the west. Militant groups such as the Taliban have used the tribal areas as a stronghold from which to wage war both in Afghanistan and against the Pakistani government. Often that violence has spilled over into Khyber Pakhtunkhwa province.

In 2007, the Taliban led by Maulana Fazlullah took over the scenic Swat Valley, marking the height of their strength there. The Pakistani military later pushed the militant group from the valley, but the Taliban has repeatedly tried to reassert itself.

The injured driver in Swabi told investigators that the gunmen stopped the vehicle and removed a boy — the son of one of the women — before indiscriminately opening fire, said police officer Fazal Malik. The woman's husband rushed to the scene after receiving a phone call alerting him to the shooting.

"I left everything and rushed towards the spot. As I reached there I saw their dead bodies were inside the vehicle and he (his son) was sitting with someone," said Zain ul Hadi.

Swabi police chief Abdur Rasheed said most of the women killed were between the ages of 20 and 22. He said four gunmen on two motorcycles fled the scene and have not been apprehended.

The NGO conducts education and health programs and runs the community center in Swabi, Akhtar said. The group has been active in the city since 1992, and started the Ujala Community Welfare Center in 2010, he added. Ujala means "light" in Urdu.

The center is financed by the Pakistani government's Poverty Alleviation Program and a German organization, said Akhtar.

He said the NGO also runs health and education projects in the South Waziristan tribal area, as well as health projects in the cities of Tank and Dera Ismail Khan and the regions of Lower Dir and Upper Kurram. All of those cities and regions are in northwest Pakistan, the area that has been most affected by the ongoing fight with militants opposed to the government.

Aid groups such as Support With Working Solution often play a vital role in many areas of Pakistan where the government has been unable to provide services such as medical clinics or schools.

Many aid groups that also work in the region are already familiar with the persistent threat militant groups pose, but the scale and viciousness of Tuesday's attack worried even veteran campaigners.

Maryam Bibi, who founded an organization called Khwendo Kor, which carries out education and development programs in Khyber Pakhtunkhwa and the nearby tribal areas, said she and many of her employees live in fear that they will be targeted next.

"I'm really very worried now because our girls go to the field. Our work is in the villages," said Bibi. She said many of the female employees of such organizations are already under pressure from family and a culture that frowns on women working outside the home and mixing with men.

"On top of that, they're shot dead," she said.

In some areas like the northwest, aid groups have had to work to overcome community fears that they are promoting a foreign agenda at odds with local traditions and values.

But many residents in Swabi said the school and medical center provided a vital service to the community, and they mourned those who were killed.

Murad Khan said his daughter was studying at the primary school, which provided free books and uniforms to students. He said many people in the area are worried that the school and clinic will close.

"This school is like a gift for all of us, the poor people of the village," he said. "People in our area are sad."

The NGO director said all projects will be suspended as security measures are reviewed but he vowed that they would resume their work soon.

He said the NGO had not received any threats before the attack.

In the southern city of Karachi, officials said four people were killed when a bomb in a parked motorcycle exploded amid a crowd of buses for political workers returning from the rally held by the Muttahida Qaumi Movement. The MQM is the dominant political party in Karachi.

There was no immediate claim of responsibility for the attack.

Dr. Saghir Ahmed, the provincial health minister, said that in addition to the dead, 41 people were injured.

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On the Internet:

http://www.khwendokor.org.pk/

http://www.swwspk.org/index.php

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Associated Press writers Riaz Khan in Peshawar and Adil Jawad in Karachi contributed to this report.

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9 Apps to Fast-Track Your New Years’ Resolutions

Whether your goal in 2013 is to lose five pounds, manage your finances, or spend more time with friends and family, there are a growing number of apps that fall into the self-help category and can assist you in accomplishing these resolutions.

At Mashable we’ve tested a lot of them out, but we’re still always hearing about new ones. There are a ton of fitness and health apps to chose from, but you might be pleasantly surprised to know they’re not all about weight loss. A device and app called Tinke monitors your stress levels and how deeply you’re breathing. An app called Fig will remind you to drink more water, skip fried foods and take breaks at work to keep you feeling good. Arianna Huffington also released an app called, “GPS for the Soul” that focuses on wellbeing.

[More from Mashable: Time Machine App Transports You Back to 2012]

Other apps can help you organize your social life, make new friends or save money for a vacation.

We’ve compiled a list of apps that can help you accomplish all sorts of goals this year. Check it out and let us know if we missed any that you plan on using in 2013.

[More from Mashable: It’s Easy to Save Videos From Facebook Poke Permanently]

OurGroceries

If you’re trying to eat out less and cook at home more often, make sure you always have a current grocery list at your fingertips. Mashable wrote about several grocery list apps this year. The standout seems to be OurGroceries for Android and iOS. If you have roommates or a significant other, everyone can download the app and sync lists. That way if you’re making a quick after-work trip to the grocery store you’ll not only be able to see the items you added, but also see what they’ve added, too.

Click here to view this gallery.

Photo courtesy of iStockphoto, hocus-focus

This story originally published on Mashable here.

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Playboy Hugh Hefner marries his 'runaway bride'

LOS ANGELES (AP) — Hugh Hefner's celebrating the new year as a married man once again.

The 86-year-old Playboy magazine founder exchanged vows with his "runaway bride," Crystal Harris, at a private Playboy Mansion ceremony on New Year's Eve. Harris, a 26-year-old "Playmate of the Month" in 2009, broke off a previous engagement to Hefner just before they were to be married in 2011.

Playboy said on Tuesday that the couple celebrated at a New Year's Eve party at the mansion with guests that included comic Jon Lovitz, Gene Simmons of KISS and baseball star Evan Longoria.

The bride wore a strapless gown in soft pink, Hefner a black tux. Hefner's been married twice before but lived the single life between 1959 and 1989.

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Brain image study: Fructose may spur overeating

This is your brain on sugar — for real. Scientists have used imaging tests to show for the first time that fructose, a sugar that saturates the American diet, can trigger brain changes that may lead to overeating.

After drinking a fructose beverage, the brain doesn't register the feeling of being full as it does when simple glucose is consumed, researchers found.

It's a small study and does not prove that fructose or its relative, high-fructose corn syrup, can cause obesity, but experts say it adds evidence they may play a role. These sugars often are added to processed foods and beverages, and consumption has risen dramatically since the 1970s along with obesity. A third of U.S. children and teens and more than two-thirds of adults are obese or overweight.

All sugars are not equal — even though they contain the same amount of calories — because they are metabolized differently in the body. Table sugar is sucrose, which is half fructose, half glucose. High-fructose corn syrup is 55 percent fructose and 45 percent glucose. Some nutrition experts say this sweetener may pose special risks, but others and the industry reject that claim. And doctors say we eat too much sugar in all forms.

For the study, scientists used magnetic resonance imaging, or MRI, scans to track blood flow in the brain in 20 young, normal-weight people before and after they had drinks containing glucose or fructose in two sessions several weeks apart.

Scans showed that drinking glucose "turns off or suppresses the activity of areas of the brain that are critical for reward and desire for food," said one study leader, Yale University endocrinologist Dr. Robert Sherwin. With fructose, "we don't see those changes," he said. "As a result, the desire to eat continues — it isn't turned off."

What's convincing, said Dr. Jonathan Purnell, an endocrinologist at Oregon Health & Science University, is that the imaging results mirrored how hungry the people said they felt, as well as what earlier studies found in animals.

"It implies that fructose, at least with regards to promoting food intake and weight gain, is a bad actor compared to glucose," said Purnell. He wrote a commentary that appears with the federally funded study in Wednesday's Journal of the American Medical Association.

Researchers now are testing obese people to see if they react the same way to fructose and glucose as the normal-weight people in this study did.

What to do? Cook more at home and limit processed foods containing fructose and high-fructose corn syrup, Purnell suggested. "Try to avoid the sugar-sweetened beverages. It doesn't mean you can't ever have them," but control their size and how often they are consumed, he said.

A second study in the journal suggests that only severe obesity carries a high death risk — and that a few extra pounds might even provide a survival advantage. However, independent experts say the methods are too flawed to make those claims.

The study comes from a federal researcher who drew controversy in 2005 with a report that found thin and normal-weight people had a slightly higher risk of death than those who were overweight. Many experts criticized that work, saying the researcher — Katherine Flegal of the Centers for Disease Control and Prevention — painted a misleading picture by including smokers and people with health problems ranging from cancer to heart disease. Those people tend to weigh less and therefore make pudgy people look healthy by comparison.

Flegal's new analysis bolsters her original one, by assessing nearly 100 other studies covering almost 2.9 million people around the world. She again concludes that very obese people had the highest risk of death but that overweight people had a 6 percent lower mortality rate than thinner people. She also concludes that mildly obese people had a death risk similar to that of normal-weight people.

Critics again have focused on her methods. This time, she included people too thin to fit what some consider to be normal weight, which could have taken in people emaciated by cancer or other diseases, as well as smokers with elevated risks of heart disease and cancer.

"Some portion of those thin people are actually sick, and sick people tend to die sooner," said Donald Berry, a biostatistician at the University of Texas MD Anderson Cancer Center in Houston.

The problems created by the study's inclusion of smokers and people with pre-existing illness "cannot be ignored," said Susan Gapstur, vice president of epidemiology for the American Cancer Society.

A third critic, Dr. Walter Willett of the Harvard School of Public Health, was blunter: "This is an even greater pile of rubbish" than the 2005 study, he said. Willett and others have done research since the 2005 study that found higher death risks from being overweight or obese.

Flegal defended her work. She noted that she used standard categories for weight classes. She said statistical adjustments were made for smokers, who were included to give a more real-world sample. She also said study participants were not in hospitals or hospices, making it unlikely that large numbers of sick people skewed the results.

"We still have to learn about obesity, including how best to measure it," Flegal's boss, CDC Director Dr. Thomas Frieden, said in a written statement. "However, it's clear that being obese is not healthy - it increases the risk of diabetes, heart disease, cancer, and many other health problems. Small, sustainable increases in physical activity and improvements in nutrition can lead to significant health improvements."

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Online:

Obesity info: http://www.cdc.gov/obesity/data/trends.html

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Marilynn Marchione can be followed at http://twitter.com/MMarchioneAP

Mike Stobbe can be followed at http://twitter.com/MikeStobbe

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GOP balks at lack of spending cuts, House could vote tonight

House Majority Leader Eric Cantor, R-Va., left, with Speaker of the House John Boehner, R-Ohio, head into a closed-door …Updated 7:27 pm ET

Republican House leaders are giving their fractious caucus a choice: Try to amend a fiscal cliff compromise passed in the Senate early Tuesday morning or go for a straight up-or-down vote on the original deal.

Either way, it apppeared the fate of the measure would be known Tuesday night.

A hard-fought bipartisan compromise hatched by Vice President Joe Biden and Senate Republican Leader Mitch McConnell to spare all but the richest Americans from painful income-tax hikes teetered on the edge of collapse on Tuesday as angry House Republicans balked at the package’s lack of spending cuts.

The legislation sailed through the Senate shortly after 2 a.m. by a lopsided 89-8 margin. But it landed with a thud in the House, where Republican Majority Leader Eric Cantor surprised lawmakers by coming out flatly against the deal.

Amending the Senate plan could jettison the entire deal.

At a 5:15 p.m. closed-door meeting, Cantor and Republican House Speaker John Boehner  “cautioned members about the risk in such a strategy,” according to a GOP leadership aide. House Rules Committee Chairman David Dreier, emerging from the gathering, bluntly told reporters “it’s pretty obvious” that amending the legislation and sending it back to the Senate would kill it. Democrats and Republicans in the upper chamber had signaled that lawmakers there would not take up a modified version of what was already a difficult deal.

The resulting pressure on GOP leaders was immense: Absent action to avert the fiscal cliff, Americans would face hefty across-the-board income-tax hikes, while indiscriminate spending cuts risked devastating domestic and defense programs. Skittish financial markets were watching the dysfunction in Washington carefully amid warnings that going off the so-called cliff could plunge the fragile economy into a new recession.

House Republicans appeared to be rejecting a bipartisan compromise that Boehner himself asked the Senate to negotiate without him, leaving the party likely facing the lion’s share of the blame from angry voters. And final passage could require a majority of Democratic votes, a tricky thing for Boehner two days before he faces reelection as speaker.

Time was running short for another reason: A new Congress will take office at noon on Thursday, forcing efforts to craft a compromise by the current Congress back to the drawing board.

Under the compromise arrangement, taxes would rise on income above $400,000 for individuals and $450,000 for households, while exemptions and deductions the wealthiest Americans use to reduce their tax bill would face new limits. The accord would also raise the taxes paid on large inheritances from 35% to 40% for estates over $5 million. And it would extend by one year unemployment benefits for some two million Americans. It would also prevent cuts in payments to doctors who treat Medicare patients and spare tens of millions of Americans who otherwise would have been hit with the Alternative Minimum Tax. And it would extend some stimulus-era tax breaks championed by progressives.

The middle class will still see its taxes go up: The final deal did not include an extension of the payroll tax holiday. A report released by the non-partisan Congressional Budget Office Tuesday complicated matters further. It said that the Senate-passed compromise would add nearly $4 trillion to the federal deficit over 10 years.

Efforts to modify the first installment of $1.2 trillion in cuts to domestic and defense programs over 10 years -- the other portion of the “fiscal cliff,” known as sequestration -- had proved a sticking point late in the game. Democrats had sought a year-long freeze but ultimately caved to Republican pressure and signed on to just a two-month delay while broader deficit-reduction talks continue.

That would put the next major battle over spending cuts right around the time that the White House and its Republican foes are battling it out over whether to raise the country's debt limit. Republicans have vowed to push for more spending cuts, equivalent to the amount of new borrowing. Obama has vowed not to negotiate as he did in 2011, when a bruising fight threatened the first-ever default on America's obligations and resulted in the first-ever downgrade of the country's credit rating. Biden sent that message to Democrats in Congress, two senators said.

The day-long political drama flared up when Cantor told House Republicans meeting behind closed doors Tuesday morning that he could not back the bill in its current form, aides and lawmakers leaving the discussions said. With conservatives already ready to oppose the measure over its lack of spending cuts, the majority leader’s bombshell spelled potential doom for the legislation.

“The Speaker and Leader laid out options to the members and listened to feedback,” Boehner spokesman Brendan Buck said in a statement about the discussion. “The lack of spending cuts in the Senate bill was a universal concern amongst members in today’s meeting.”

As House Republicans raged at the bill, key House Democrats emerging from a closed-door meeting with Biden expressed support for the compromise and pressed Boehner for a vote on the legislation as currently written.

“Our Speaker has said when the Senate acts, we will have a vote in the House. That is what he said, that is what we expect, that is what the American people deserve…a straight up-or-down vote,” Democratic House Minority Leader Nancy Pelosi told reporters.

Conservative activist organizations like the anti-tax Club for Growth warned lawmakers to oppose the compromise. The Club charged in a message to Congress that “this bill raises taxes immediately with the promise of cutting spending later.”

Efforts to modify the first installment of $1.2 trillion in cuts to domestic and defense programs over 10 years -- the other portion of the “fiscal cliff,” known as sequestration -- had proved a sticking point late in the game. Democrats had sought a year-long freeze but ultimately caved to Republican pressure and signed on to just a two-month delay while broader deficit-reduction talks continue.

That would put the next major battle over spending cuts right around the time that the White House and its Republican foes are battling it out over whether to raise the country's debt limit. Republicans have vowed to push for more spending cuts, equivalent to the amount of new borrowing. Obama has vowed not to negotiate as he did in 2011, when a bruising fight threatened the first-ever default on America's obligations and resulted in the first-ever downgrade of the country's credit rating. Biden sent that message to Democrats in Congress, two senators said.

“This agreement is the right thing to do for our country and the House should pass it without delay,” President Barack Obama said in a written statement shortly after the Senate vote.

There were signs that the 2016 presidential race shaped the outcome in the Senate. Republican Senator Marco Rubio, widely thought to have his eye on his party’s nomination, voted no. Republican Senator Rand Paul, who could take up the libertarian mantle of his father Ron Paul, did as well.

Biden's visit -- his second to Congressional Democrats in two days -- aimed to soothe concerns about the bill and about the coming battles on deficit reduction.

“This is a simple case of trying to Make sure that the perfect does not become the enemy of the good,” said Democratic Representative Elijah Cummings, one of the chamber’s most steadfast liberals. “Nobody’s going to like everything about it.”

Asked whether House progressives, who had hoped for a lower income threshold, would back the bill, Cummings said he could not predict but stressed: “I am one of the most progressive members, and I will vote for it.”

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NKorea's Kim wants better living standards, arms

PYONGYANG, North Korea (AP) — North Korean leader Kim Jong Un says his people must pursue economic improvement with the same urgency scientists put into the launch of a long-range rocket last month.

Kim said in a speech Tuesday that boosting living standards is the new year's most important task. But he's also calling for the development of more advanced weapons.

North Korea struggles to grow enough food for its 24 million people.

Last year saw plunging inter-Korean ties, the collapse of a U.S.-North Korean food-aid-for-nuclear-freeze deal and two North Korean long-range rocket launches that Washington and others called covers for banned ballistic missile tests.

Kim took over after his father Kim Jong Il's Dec. 17, 2011, death.

He also called for a "revolution" in science and technology and more amusement parks.

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Armstrong better, Green Day to resume tour in 2013

LOS ANGELES (AP) — Green Day is going back on the road.

The Grammy-winning punk band announced new tour dates Monday.

The band canceled the rest of its 2012 club schedule and postponed the start of a 2013 arena tour after singer-guitarist Billie Joe Armstrong's substance abuse problems emerged publicly in September when he had a profane meltdown on the stage of the iHeartRadio Music Festival in Las Vegas. The band's rep announced later that Armstrong was headed to treatment for substance abuse.

"I just want to thank you all for the love and support you've shown for the past few months," Armstrong told fans in a statement Monday. "Believe me, it hasn't gone unnoticed and I'm eternally grateful to have such an amazing set of friends and family. I'm getting better every day. So now, without further ado, the show must go on."

The tour is scheduled to begin March 28 at the Allstate Arena in the Chicago area. Tickets for postponed shows will be honored on the new dates, and refunds will be available for canceled shows.

"We want to thank everyone for hanging in with us for the last few months," the band said. "We are very excited to hit the road and see all of you again, though we regret having to cancel more shows."

The band released their most recent album, "Tre," on Dec. 11, more than a month ahead of schedule.

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Online:

http://www.greenday.com/

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Clinton's blood clot an uncommon complication

The kind of blood clot in the skull that doctors say Hillary Rodham Clinton has is relatively uncommon but can occur after an injury like the fall and concussion the secretary of state was diagnosed with earlier this month.

Doctors said Monday that an MRI scan revealed a clot in a vein in the space between the brain and the skull behind Clinton's right ear.

The clot did not lead to a stroke or neurological damage and is being treated with blood thinners, and she will be released once the proper dose is worked out, her doctors said in a statement.

Clinton has been at New York-Presbyterian Hospital since Sunday, when the clot was diagnosed during what the doctors called a routine follow-up exam. At the time, her spokesman would not say where the clot was located, leading to speculation it was another leg clot like the one she suffered behind her right knee in 1998.

Clinton had been diagnosed with a concussion Dec. 13 after a fall in her home that was blamed on a stomach virus that left her weak and dehydrated.

The type of clot she developed, a sinus venous thrombosis, "certainly isn't the most common thing to happen after a concussion" and is one of the few types of blood clots in the skull or head that are treated with blood thinners, said neurologist Dr. Larry Goldstein. He is director of Duke University's stroke center and has no role in Clinton's care or personal knowledge of it.

The area where Clinton's clot developed is "a drainage channel, the equivalent of a big vein inside the skull — it's how the blood gets back to the heart," Goldstein explained.

It should have no long-term consequences if her doctors are saying she has suffered no neurological damage from it, he said.

Dr. Joseph Broderick, chairman of neurology at the University of Cincinnati College of Medicine, also called Clinton's problem "relatively uncommon" after a concussion.

He and Goldstein said the problem often is overdiagnosed. They said scans often show these large "draining pipes" on either side of the head are different sizes, which can mean blood has pooled or can be merely an anatomical difference.

"I'm sure she's got the best doctors in the world looking at her," and if they are saying she has no neurological damage, "I would think it would be a pretty optimistic long-term outcome," Broderick said.

A review article in the New England Journal of Medicine in 2005 describes the condition, which more often occurs in newborns or young people but can occur after a head injury. With modern treatment, more than 80 percent have a good neurologic outcome, the report says.

In the statement, Clinton's doctors said she "is making excellent progress and we are confident she will make a full recovery. She is in good spirits, engaging with her doctors, her family, and her staff."

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Online:

Medical journal: http://dura.stanford.edu/Articles/Stam_NEJM05.pdf

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Fiscal cliff tumble looms despite Senate efforts

By Richard Cowan and Roberta Rampton

WASHINGTON (Reuters) - The United States was on track to tumble over the "fiscal cliff" at midnight on Monday, at least for a day, as lawmakers held back from supporting an eleventh-hour plan from Senate leaders to avert severe tax increases and spending cuts.

The U.S. House of Representatives looked unlikely to vote on a Senate "fiscal cliff" plan before midnight, possibly pushing a legislative decision into New Year's Day, when financial markets will be closed.

The plan was heavy on tax increases and light on spending cuts, which was unlikely to appeal to Republicans in the House.

It would raise income taxes on high-income Americans, but leave taxes at current levels for the middle class, a key goal of President Barack Obama.

But there was discontent among Senate Democrats worried that the proposal did not go far enough in taxing the rich. The Democrats asked for a meeting with Vice President Joe Biden to have him explain the talks he was having with Republican Senate Minority Leader Mitch McConnell.

"The caucus as a whole is not sold" on the plan, said a Senate Democratic aide. "We just don't have the votes for it."

If Congress fails to act, about $600 billion in tax increases - much steeper than those in the Senate plan - and government-wide spending cuts will begin taking effect after midnight, harsh measures that could lead to a recession.

But lawmakers could still vote for a deal on New Year's Day or later and prevent the worst of the fiscal cliff effects.

The House expects to reconvene on Tuesday at noon, Republican Representative Steven LaTourette said. He added that House members had been told to stay close on Monday evening and that they may be called back to continue negotiations.

Under the Senate plan, income above $450,000 per household or $400,000 per individual would be taxed at 39.6 percent, up from 35 percent. Income up to those levels would be taxed at the current, reduced tax rates put in place under former President George W. Bush.

The Senate plan would raise estate taxes on inherited wealth and permanently fix the alternative minimum tax, or AMT, so that it did not threaten each year to sweep in millions of middle-income Americans for whom it was not intended.

The plan also postpones for two months the automatic, across-the-board spending cuts in defense and domestic programs that are part of the fiscal cliff, Senator John McCain said.

SENATE DEMOCRATS UNSURE

Some Senate Democrats did not like the $450,000 threshold for raising taxes on the rich - they wanted $250,000 - or the higher threshold for raising estate taxes. Democrats also are upset there is no agreement yet to put off the first round of $1.2 trillion in automatic spending cuts.

Republicans already are pushing for switching those across-the-board cuts to savings in the Medicare and Social Security healthcare and retirement programs and threatening to block a debt limit increase in February unless they get their way. But that is a fight that would most likely play out in January and February.

Some Senate Democrats aides were dispirited that Biden, a fellow Democrat, had gone further than they wanted in the fiscal cliff talks, just as he did in December 2010 when all Bush tax cuts were extended for two years.

Shortly after the plan emerged, Obama said agreement was within sight, but he sounded a cautious note.

"There are still issues to resolve, but we're hopeful that Congress can get it done, but it's not done," Obama, a Democrat, said at a White House event.

U.S. stocks rose on the day, with the market closing before the latest news broke about the House not voting. The benchmark Dow Jones industrial average closed up 1.3 percent at 13,104.

Even if the country tumbles over the cliff, legislative action afterward could soften the blow.

Final legislation can be backdated to January 1, for instance, said law firm K&L Gates partner Mary Burke Baker, who spent decades at the Internal Revenue Service.

"The important date is the date in the legislative language ... no matter what day the Senate or House pass the law, or the date the president signs it," she said.

Former Obama administration Treasury Department tax official Michael Mundaca agreed, although he said there would likely be delays in filing for many taxpayers as the IRS gets its computers into gear.

A deal on Tuesday will likely leave unsolved the issue of the "debt ceiling," which caps how much debt the federal government can hold.

Treasury Secretary Timothy Geithner said in a letter to congressional leaders that the government would suspend some investments in pension and health benefit funds for federal workers beginning on Monday in a move that allows it to keep borrowing for the meantime.

(Additional reporting by Mark Felsenthal, Tabassum Zakaria, Kim Dixon, Jeff Mason, Rachelle Younglai and David Morgan, Writing by Kevin Drawbaugh, Editing by Alistair Bell and Peter Cooney)

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