Chinese Firm Is Cleared to Buy American DNA Sequencing Company


Ramin Rahimian for The New York Times


DNA sequencing machines at Complete Genomics in California. The firm dismissed concerns about its acquisition.







The federal government has given national security clearance to the controversial purchase of an American DNA sequencing company by a Chinese firm.




The Chinese firm, BGI-Shenzhen, said in a statement this weekend that its acquisition of Complete Genomics, based in Mountain View, Calif., had been cleared by the federal Committee on Foreign Investment in the United States, which reviews the national security implications of foreign takeovers of American companies. The deal still requires antitrust clearance by the Federal Trade Commission.


Some scientists, politicians and industry executives had said the takeover represented a threat to American competitiveness in DNA sequencing, a technology that is becoming crucial for the development of drugs, diagnostics and improved crops.


The fact that the $117.6 million deal was controversial at all reflects a change in the genomics community.


A decade ago, the Human Genome Project, in which scientists from many nations helped unravel the genetic blueprint of mankind, was celebrated for its spirit of international cooperation. One of the participants in the project was BGI, which was then known as the Beijing Genomics Institute.


But with DNA sequencing now becoming a big business and linchpin of the biotechnology industry, international rivalries and nationalism are starting to move front and center in any acquisition.


Much of the alarm about the deal has been raised by Illumina, a San Diego company that is the market leader in sequencing machines. It has potentially the most to lose from the deal because BGI might buy fewer Illumina products and even become a competitor. Weeks after the BGI deal was announced, Illumina made its own belated bid for Complete Genomics, offering 15 cents a share more than BGI’s bid of $3.15. But Complete Genomics rebuffed Illumina, saying such a merger would never clear antitrust review.


Illumina also hired a Washington lobbyist, the Glover Park Group, to stir up opposition to the deal in Congress. Representative Frank R. Wolf, Republican of Virginia, was the only member of Congress known to have publicly expressed concern.


BGI and Complete Genomics point out that Illumina has long sold its sequencing machines — including a record-setting order of 128 high-end machines — to BGI without raising any security concerns. Sequencing machines have not been subject to export controls like aerospace equipment, lasers, sensors and other gear that can have clear military uses.


“Illumina has never previously considered its business with BGI as ‘sensitive’ in the least,” Ye Yin, the chief operating officer of BGI, said in a November letter to Complete Genomics that was made public in a regulatory filing. In the letter, Illumina was accused of “obvious hypocrisy.”


BGI and Complete said that Illumina was trying to derail the agreement and acquire Complete Genomics itself in order to “eliminate its closest competitor, Complete.”


BGI is already one of the most prolific DNA sequencers in the world, but it buys the sequencing machines it uses from others, mainly Illumina.


Illumina, joined by some American scientists, said it worried that if BGI gained access to Complete’s sequencing technology, the Chinese company might use low prices to undercut the American sequencing companies that now dominate the industry.


Some also said that with Complete Genomics providing an American base, BGI would have access to more DNA samples from Americans, helping it compile a huge database of genetic information that could be used to develop drugs and diagnostic tests. Some also worried about protection of the privacy of genetic information.


“What’s to stop them from mining genomic data of American samples to some unknown nefarious end?” Elaine R. Mardis, co-director of the genome sequencing center at Washington University in St. Louis, said in an e-mail.


Dr. Mardis could not specify what kind of nefarious end she imagined. But opponents of the deal cited a November article in The Atlantic saying that in the future, pathogens could be genetically engineered to attack particular individuals, including the president, based on their DNA sequences.


BGI and Complete Genomics dismissed such concerns as preposterous.


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Immigration reform could get overshadowed in Congress









WASHINGTON — The window to pass immigration laws next year is narrowing as the effort competes with a renewed debate over gun laws and the lingering fight over taxes and the budget, according to congressional staffers and outside advocates.


Key congressional committees are preparing for a package of gun control laws to be negotiated and possibly introduced in Congress during the first few months of next year. The shift would push the debate in Congress over immigration reform into the spring.


But as budget negotiations continue to stir tensions between Republicans and Democrats, and as lobbyists take to their corners over gun laws, some are concerned that the heated atmosphere could spoil the early signs of bipartisan cooperation on immigration that emerged after the election.





In phone calls over the holidays, White House officials sought to reassure advocates that the push for gun control won't distract President Obama from his promise to stump for new immigration legislation early in the year.


The uncertainty is feeding jitters that Obama may be unable to deliver on his long-standing promise to create a path to citizenship for the 11 million people in the U.S. unlawfully.


"I am concerned that an issue such as immigration where we can find strong bipartisan consensus will be demagogued and politicized, because that is the environment," said Alfonso Aguilar, a Republican strategist at the Latino Partnership for Conservative Principles, a Washington-based nonprofit.


New gun laws would probably have to pass through the Senate Judiciary Committee, the same committee that would work on an immigration bill that could be hundreds of pages long.


The tough work of hammering out a compromise over immigration in the committee would best be wrapped up by the end of June, congressional staffers said, in case one of the Supreme Court justices retires, which would set up a high-profile and time-consuming nomination process that could overshadow the immigration issue.


"Voters want to see action," said Clarissa Martinez de Castro, head of civic engagement and immigration for the National Council of La Raza. "If the American public every day has to grapple with multiple priorities, that is the least they expect from their members of Congress."


After the Dec. 14 school shooting that killed 20 children and six adults in Newtown, Conn., Obama tapped Vice President Joe Biden to head a task force that is expected to propose new gun control measures by the end of January.


"The question is: Would the Congress love to have something come along that would sidetrack immigration reform? I believe there are some members of Congress who would like that," said Eliseo Medina, secretary-treasurer of the Service Employees International Union, which represents more than 2 million workers.


"But the fact is, they won't have the luxury of ignoring it," he said.


The crowded agenda has not changed plans by advocacy groups to launch a nationwide publicity and lobbying campaign early next year to put pressure on lawmakers to support changing immigration laws.


"As horrific as the tragedy was in Connecticut, in the grand scheme of things, these issues can run on parallel tracks," said Mary Giovagnoli, director of the Immigration Policy Center, a think tank based in Washington.


"They are not in competition; they are complementary," said Angela Kelley, an expert on immigration at the Center for American Progress, a liberal think tank in Washington. "The White House can walk and chew gum, as can lawmakers."


"If [lawmakers] are working 40 hours a week, they should be able to get both done," she said.


brian.bennett@latimes.com





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A Google-a-Day Puzzle for Dec. 30











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


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

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Hot spots draw believers, but not doomsday






As the sun rose from time zone to time zone across the world on Friday, there was still no sign of the world’s end — but that didn’t stop those convinced that a 5,125-year Mayan calendar predicts the apocalypse from gathering at some of the world’s purported survival hot spots.


Many of the esoterically inclined expected a new age of consciousness — others wanted a party. But, in some places said to offer salvation from the end, fewer people showed up than officials had predicted — much to the disappointment of vendors hoping to sell souvenirs.






Here are some key places being marked by the fascination over doomsday rumors:


MEXICO


In an area of Mexico that was once the ancient Mayan heartland, spiritualists gathered in the darkness before dawn on Friday to prepare white clothes, drums, conch shells and incense. They believed the sunrise would herald the birth of a new and better age as a vast cycle in the Mayan calendar comes to an end.


Many people who came to Yucatan for the occasion were already calling it “a new sun” and “a new era.”


FRANCE


According to one rumor, a rocky mountain in the French Pyrenees will be the sole place on Earth to escape destruction. A giant UFO and aliens are said to be waiting under the mountain, ready to burst through and spirit those nearby to safety. But there is bad news for those seeking salvation: French gendarmes, some on horseback, blocked outsiders from reaching the Bugarach peak and its village of some 200 people.


Eric Freysselinard, head of local government, said the security forces had “partially stopped the new age enthusiasts as well as curious people from coming to the area.”


Meanwhile, some Bugarach residents dressed up like aliens, with tinfoil costumes and funnels and fake antenna on their heads, strolling around their village Friday to make light of the rumored UFO prophecy.


RUSSIA


Doomsday rumors have prompted some people across Russia to stock up on candles, water, canned foods and other non-perishable foods. The apocalypse has proven a good business, with some shops selling survival aid packages that include soap and vodka.


In Moscow, salvation has also been promised in the underground bunker for the former Soviet dictator Josef Stalin — with a 50 percent refund if nothing happens. An underground stay was originally priced at 50,000 rubles ($ 1,625) but dropped to 15,000 ($ 490) a week ahead of the feared end.


The bunker, located 65 meters (210 feet) below ground, was designed to withstand a nuclear attack. Now home to a small museum, it has an independent electricity supply, water and food — but no more room, because the museum has already sold out all 1,000 tickets.


BRITAIN


Hundreds of people have converged on Stonehenge for an “End of the World” party that coincides with the Winter Solstice.


Arthur Uther Pendragon, Britain’s best-known druid, said he was anticipating a much larger crowd than usual at Stonehenge this year. But he doesn’t agree that the world is ending, noting that he and fellow druids believe that things happen in cycles.


“We’re looking at it more as a new beginning than an end,” he said. “We’re looking at new hope.”


Meanwhile, end-of-days parties will be held across London on Friday. One event billed as a “last supper club” is offering a three-course meal served inside an “ark.”


SERBIA


Some Serbs are saying to forget that sacred mountain in the French Pyrenees. The place to be Friday is Mount Rtanj, a pyramid-shaped peak in Serbia already drawing cultists.


According to legend, the mountain once swallowed an evil sorcerer who will be released on doomsday in a ball of fire that will hit the mountain top. The inside of the mountain will then open up, becoming a safe place to hide as the sorcerer goes on to destroy the rest of the world. In the meantime, some old coal mine shafts have been opened up as safe rooms.


On Friday a New Age group called “The Spirit of Rtanj” was holding a conference there. Participants, however, said they expect not the end of time but the start of a new time cycle. Locals turned out to sell brandy and herbs.


“There will be no tragedy, no doomsday,” said resident Dalibor Jovic. “It was supposed to happen at 12:12 and I think that time has passed. So, we can now go on with our lives and be happy to be alive.”


TURKEY


A small Turkish village known for its wines, Sirince, has also been touted as the only place after Bugarach that would escape the world’s end. But on Friday journalists and security officials outnumbered cultists. This outcome disappointed local business people who had prepared a range of doomsday products to sell, including a specially labeled Doomsday wine and Turkish delight candy whose “best before” date was Dec. 21, 2012. One restaurant prepared a special “last meal” menu that included a “heaven kebab” and “forbidden fruit dessert.”


ITALY


Another spot said to be spared: Cisternino, a beautiful small town in southern Italy in an area of trulli, traditional dry stone huts with conical roofs. The notion that Cisternino could be a safe haven at world’s end derives from an Indian guru, Babaji, who said “Cisternino will become an island” at world’s end. His followers built a community in Cisternino centered on an ashram built in 1979. Hotel bookings are up this weekend.


Mayor Donato Baccaro told the AP that the beauty of the place has inspired many foreigners to live there. “This confirms that this place has a special energy,” he said.


CHINA


A fringe Christian group has been spreading rumors about the world’s impending end, prompting Chinese authorities to detain more than 500 people this week and seize leaflets, video discs, books and other material.


Those detained are reported to be members of the group Almighty God, also called Eastern Lightning, which preaches that Jesus has reappeared as a woman in central China. Authorities in the province of Qinghai say they are waging a “severe crackdown” on the group, accusing it of attacking the Communist Party and the government.


U.S.


Dozens of Michigan schools canceled classes for thousands of students to cool off rumored threats of violence and problems related to doomsday. The fears were exacerbated by the recent shooting at a Connecticut elementary school, which “changed all of us,” the school system in Genesee County said. “Canceling school is the right thing to do.”


___


Associated Press writers Florent Bajrami in Bugarach, France; Mansur Mirovalev in Moscow; Peppino Ciraci in Cisternino, Italy; Suzan Fraser in Ankara, Turkey; Paisley Dodds in London; and Dejan Mladenovic in Mount Rtanj, Serbia, contributed to this report.


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Elwood V. Jensen, Pioneer in Breast Cancer Treatment, Dies at 92


Tony Jones/Cincinnati Enquirer, via Associated Press


Elwood V. Jensen in 2004.







Elwood V. Jensen, a medical researcher whose studies of steroid hormones led to new treatments for breast cancer that have been credited with saving or extending hundreds of thousands of lives, died on Dec. 16 in Cincinnati. He was 92.




The cause was complications of pneumonia, his son, Thomas Jensen, said.


In 2004 Dr. Jensen received the Albert Lasker Basic Medical Research Award, one of the most respected science prizes in the world.


When Dr. Jensen started his research at the University of Chicago in the 1950s, steroid hormones, which alter the functioning of cells, were thought to interact with cells through a series of chemical reactions involving enzymes.


However, Dr. Jensen used radioactive tracers to show that steroid hormones actually affect cells by binding to a specific receptor protein inside them. He first focused on the steroid hormone estrogen.


By 1968, Dr. Jensen had developed a test for the presence of estrogen receptors in breast cancer cells. He later concluded that such receptors were present in about a third of those cells.


Breast cancers that are estrogen positive, meaning they have receptors for the hormone, can be treated with medications like Tamoxifen or with other methods of inhibiting estrogen in a patient’s system, like removal of the ovaries. Women with receptor-rich breast cancers often go into remission when estrogen is blocked or removed.


By the mid-1980s, a test developed by Dr. Jensen and a colleague at the University of Chicago, Dr. Geoffrey Greene, could be used to determine the extent of estrogen receptors in breast and other cancers. That test became a standard part of care for breast cancer patients.


Scientists like Dr. Pierre Chambon and Dr. Ronald M. Evans, who shared the 2004 Lasker prize with Dr. Jensen, went on to show that many types of receptors exist. The receptors are crucial components of the cell’s control system and transmit signals in an array of vital functions, from the development of organs in the womb to the control of fat cells and the regulation of cholesterol.


Dr. Jensen’s work also led to the development of drugs that can enhance or inhibit the effects of hormones. Such drugs are used to treat prostate and other cancers.


Elwood Vernon Jensen was born in Fargo, N.D., on Jan. 13, 1920, to Eli and Vera Morris Jensen. He majored in chemistry at what was then Wittenberg College in Springfield, Ohio, and had begun graduate training in organic chemistry at the University of Chicago when World War II began.


Dr. Jensen wanted to join the Army Air Forces, but his poor vision kept him from becoming a pilot. During the war he synthesized poison gases at the University of Chicago, exposure to which twice put him in the hospital. His work on toxic chemicals, he said, inspired him to pursue biology and medicine.


Dr. Jensen studied steroid hormone chemistry at the Swiss Federal Institute of Technology on a Guggenheim Fellowship after the war. While there, he climbed the Matterhorn, one of the highest peaks in the Alps, even though he had no mountaineering experience. He often equated his successful research to the novel approach taken by Edward Whymper, the first mountaineer to reach the Matterhorn’s summit. Mr. Whymper went against conventional wisdom and scaled the mountain’s Swiss face, after twice failing to reach the summit on the Italian side.


Dr. Jensen joined the University of Chicago as an assistant professor of surgery in 1947, working closely with the Nobel laureate Charles Huggins. He became an original member of the research team at the Ben May Laboratory for Cancer Research (now the Ben May Department for Cancer Research) in 1951, and became the director after Dr. Huggins stepped down.


He came to work at the University of Cincinnati in 2002, and continued to do research there until last year.


His first wife, the former Mary Collette, died in 1982. In addition to his son, Dr. Jensen is survived by his second wife, the former Hiltrud Herborg; a daughter, Karen C. Jensen; a sister, Margaret Brennan; two grandchildren; and three great-grandchildren.


Dr. Jensen’s wife was found to have breast cancer in 2005. She had the tumor removed, he said in an interview, but tested positive for the estrogen receptor and was successfully treated with a medication that prevents estrogen synthesis.


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French Council Strikes Down 75% Tax Rate on Rich





PARIS — France’s Constitutional Council on Saturday struck down the Socialist government’s plan to impose a 75 percent marginal income tax rate on the wealthy, a measure that figured prominently among the campaign promises of President François Hollande and that had become a divisive emblem of his approach to cutting the budget deficit.




Prime Minister Jean-Marc Ayrault quickly pledged that the government would reintroduce a revised version of the tax for next year to address the criticisms of the Constitutional Council, which ruled that the measure did not tax affected households equally.


The 75 percent rate was always a symbolic political gesture, as Mr. Hollande himself has acknowledged. It was to expire in two years and would have applied only to annual income above 1 million euros, or about $1.3 million, and so would have affected no more than a few thousand taxpayers.


Tax revenues from the measure would have reached just a few hundred million dollars, little more than a bucket of water in France’s deficit sea; the budget deficit is about $112 billion this year.


The council ruled that the tax was unfair because it would have applied unevenly to different households with the same combined income. A couple making a combined 1.5 million euros a year, for instance, would be exempt from the tax so long as both partners earned less than 1 million euros individually. If one partner earned more than 1 million euros, however, the couple would have been required to pay the 75 percent rate on their combined earnings of more than 1 million.


Mr. Hollande introduced the tax during his presidential campaign — a sharp break from his center-right rival, Nicolas Sarkozy, who had established a tax ceiling of 50 percent of earnings — to prove his leftist credentials in the face of a challenge from a candidate supported by the Communists, Jean-Luc Mélenchon.


Among the opposition on the right, politicians said the 75 percent rate was tantamount to theft, calling it “confiscatory” and insisting that it would drive investors and entrepreneurs out of the country. There have been reports and rumors of as many as 5,000 wealthy French citizens moving out of the country, though there are no official figures.


Most recently, in what has grown into a minor national scandal, it was revealed that the actor Gérard Depardieu would be taking up residence in Belgium, where there is no wealth tax and where the maximum income tax rate is 50 percent.


In France, without the 75 percent tax rate, the highest income tax rate will now be 45 percent. (With the invalidation of the 75 percent rate, French Twitter users have implored Mr. Depardieu to return to France, some facetiously, some not.) The 45 percent rate, which will apply to income above 150,000 euros, or about $198,000, is itself an increase from the previous top rate of 41 percent.


The Constitutional Council approved the increase in its ruling Saturday, along with several general elements of the government’s planned budget for next year: an increase in tax withholdings, the taxing of capital gains at the same rates as income tax and a rise in the wealth tax rates.


It invalidated a proposed 75 percent tax on complementary retirement pensions, however, calling it “confiscatory.” The council reduced the rate to 68 percent.


Mr. Hollande has committed to cutting France’s budget deficit, which stood at 4.5 percent of gross domestic product this year, to 3 percent next year. But he has emphasized tax increases rather than spending cuts. To meet the target, Parliament this month approved a spending freeze that would save about $13 billion, along with $26 billion in additional tax revenues — including those meant to come from the 75 percent rate — for the 2013 budget. But the budget was drawn up on the basis of the government’s growth estimate of 0.8 percent, a number viewed by many economists in France and elsewhere as unrealistically high.


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Army Corps of Engineers clear-cuts lush habitat in Valley









An area that just a week ago was lush habitat on the Sepulveda Basin's wild side, home to one of the most diverse bird populations in Southern California, has been reduced to dirt and broken limbs — by the U.S. Army Corps of Engineers.


Audubon Society members stumbled upon the barren landscape last weekend during their annual Christmas bird count. Now, they are calling for an investigation into the loss of about 43 acres of cottonwood and willow groves, undergrowth and marshes that had maintained a rich inventory of mammals, reptiles and 250 species of birds.


Much of the area's vegetation had been planted in the 1980s, part of an Army Corps project that turned that portion of the Los Angeles River flood plain into a designated wildlife preserve.





Tramping through the mud Friday, botanist Ellen Zunino — who was among hundreds of volunteers who planted willows, coyote brush, mule fat and elderberry trees in the area — was engulfed by anger, sadness and disbelief.


"I'm heartbroken. I was so proud of our work," the 66-year-old said, taking a deep breath. "I don't see any of the usual signs of preparation for a job like this, such as marked trees or colored flags," Zunino added. "It seems haphazard and mean-spirited, almost as though someone was taking revenge on the habitat."


In 2010, the preserve had been reclassified as a "vegetation management area" — with a new five-year mission of replacing trees and shrubs with native grasses to improve access for Army Corps staffers, increase public safety and discourage crime in an area plagued by sex-for-drugs encampments.


The Army Corps declared that an environmental impact report on the effort was not necessary because it would not significantly disturb wildlife and habitat.


By Friday, however, nearly all of the vegetation — native and non-native — had been removed. Decomposed granite trails, signs, stone structures and other improvements bought and installed with public money had been plowed under.


In an interview, Army Corps Deputy District Cmdr. Alexander Deraney acknowledged that "somehow, we did not clearly communicate" to environmentalists and community groups the revised plan for the area 17 miles northwest of downtown Los Angeles. He added that the corps would "make the process more transparent in the future."


But Kris Ohlenkamp, conservation chairman of the San Fernando Valley Audubon Society, asserted that the corps had misrepresented its intent all along.


Walking Friday through what once had been a migratory stop for some of the rarest birds in the state — scissor-tailed flycatchers, yellow-billed cuckoos, least Bell's vireos, rose-breasted grosbeaks — Ohlenkamp said: "We knew that the corps had a new vision for this area, but we never thought it would ever come to this."


Frequent catastrophic floods prompted civic leaders in the 1930s to transform the river into a flood-control channel. Nearly the entire 51-mile river bottom was sheathed in concrete, except in a few spots such as the Sepulveda Basin.


Over the decades, awareness of the river's recreational potential grew. And with pressure from environmental groups, Los Angeles County and corps officials in the 1980s made major changes. The waterway and surrounding flood plain were slowly transformed into a greenbelt of parks, trees and bike paths, courtesy of bond measures approved by voters.


Then in 2010, the Environmental Protection Agency deemed the entire river to be navigable and therefore subject to protections under of the Clean Water Act.


A year ago, Army Corps of Engineers District Cmdr. Col. Mark Toy issued a license allowing the Los Angeles Conservation Corps to operate a paddle-boat program in the Sepulveda Basin, along a 1.5-mile stretch of river shaded by trees teeming with herons, egrets and cormorants.


This summer, paying customers will disembark a hundred yards from the corps' recent clear-cuts.


"Environmental stewardship is critical for us," Deraney said. "But assuring public safety and access to infrastructure designed to deal with flooding are paramount."


As he spoke, a Cooper's hawk swooped down and landed on a nearby tree stump.


louis.sahagun@latimes.com





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A Google-a-Day Puzzle for Dec. 29











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


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


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


And now, without further ado, we give you…


TODAY’S PUZZLE:



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




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

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Follow @fitzwillie and @wiredgeekdad on Twitter.



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Stahl arrested for investigation of lewd conduct






LOS ANGELES (AP) — Los Angeles police say actor Nick Stahl has been arrested for investigation of lewd conduct.


The 33-year-old “Terminator 3″ star was arrested about 8 p.m. Thursday on Hollywood Boulevard. He was booked on a misdemeanor count of lewd conduct and released from custody.






The Los Angeles Times reports (http://lat.ms/YU6uBO) that Stahl was arrested at an adult movie shop during a routine undercover police operation.


In May, Stahl had been reported missing by his wife, but he later turned up.


Stahl was a child star who performed in the 1993 film “The Man Without a Face.” He also has appeared in the 2003-2005 HBO series “Carnivale’” and starred in “Mirrors 2″ in 2010. An email seeking comment from his publicist was not immediately returned Friday.


___


Information from: Los Angeles Times, http://www.latimes.com


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Senate Leaders Set to Work on a Last-Minute Tax Agreement


Luke Sharrett for The New York Times


In a televised statement at the White House after meeting with Congressional leaders on Friday, President Obama said he was “modestly optimistic” that an agreement could be reached.







WASHINGTON — At the urging of President Obama, the Democratic and Republican leaders of the Senate set to work Friday night to assemble a last-minute tax deal that could pass both chambers of Congress and avert large tax increases and budget cuts next year, or at least stop the worst of the economic punch from landing beginning Jan. 1.




After weeks of fruitless negotiations between the president and Speaker John A. Boehner, Mr. Obama turned to Senator Harry Reid, the majority leader, and Senator Mitch McConnell of Kentucky, the Republican leader — two men who have been fighting for dominance of the Senate for years — to find a solution. The speaker, once seen as the linchpin for any agreement, essentially ceded final control to the Senate and said the House would act on whatever the Senate could produce.


“The hour for immediate action is here. It is now,” Mr. Obama said in the White House briefing room after an hourlong meeting with the two Senate leaders, Mr. Boehner and Representative Nancy Pelosi, the House Democratic leader. He added, “The American people are not going to have any patience for a politically self-inflicted wound to our economy, not right now.”


Senate Democrats want Mr. McConnell to propose an alternative to Mr. Obama’s final offer and present it to them in time for a compromise bill to reach the Senate floor on Monday and be sent to the House. Absent a bipartisan deal, Mr. Reid said Friday night that he would accede to the president’s request to put to a vote on Monday Mr. Obama’s plan to extend tax cuts for all income below $250,000 a year and to renew expiring unemployment compensation for as many as two million people, essentially daring Republicans to block it and allow taxes to rise for most Americans.


Bipartisan agreement still hinged on the Senate leaders finding an income level above which taxes will rise on Jan. 1, most likely higher than Mr. Obama’s level of $250,000. Quiet negotiations between Senate and White House officials were already drifting up toward around $400,000 before Friday’s White House meeting. The two sides were also apart on where to set taxes on inherited estates.


But senators broke from a long huddle on the Senate floor with Mr. McConnell on Friday night to say they were more optimistic that a deal was within reach. Mr. McConnell, White House aides and Mr. Reid were to continue talks on Saturday, aiming for a breakthrough as soon as Sunday.


“We’re working with the White House, and hopefully we’ll come up with something we can recommend to our respective caucuses,” said Mr. McConnell, who has played a central role in cutting similar bipartisan deals in the past.


The emerging path to a possible resolution, at least on Friday, appeared to mirror the end of the protracted stalemate over the payroll tax last year. In that conflict, House Republicans refused to go along with a short-term extension of the cut, but Mr. McConnell reached an agreement that permitted such a measure to get through the Senate, and the House speaker essentially forced members to accept it from afar, after they had left forChristmas recess.


This time, the consequences are more significant, with more than a half-trillion dollars in tax increases and across-the-board spending cuts just days from going into force, an event most economists warn would send the economy back into recession if not quickly mitigated. With the House set to return to the Capitol on Sunday night, Mr. Boehner has said he would place any Senate bill before his chamber and let the vote proceed and the chips fall. The House could also change the legislation and return it to the Senate.


If the Senate is able to produce a bill that is largely bipartisan, there is a strong belief among House Republicans that the same measure would easily pass the House, with a large number of Republicans. While Mr. Boehner was unable to muster enough votes for his alternative bill that would have protected tax cuts for income under $1 million, that was because the measure lacked Democratic support, and was roughly a few dozen votes shy of passage with Republicans alone.


Helene Cooper and Ron Nixon contributed reporting.



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