Florida man sentenced to 10 years in "hackerazzi" case

A Florida man who pleaded guilty to hacking into the email accounts of celebrities to gain access to nude photos and private information was sentenced to 10 years in prison by a federal judge in Los Angeles on Monday.
Former office clerk Christopher Chaney, 36, said before the trial that he hacked into the accounts of film star Scarlett Johansson and other celebrities because he was addicted to spying on their personal lives.
Prosecutors said Chaney illegally gained access to email accounts of more than 50 people in the entertainment industry, including Johansson, actress Mila Kunis, and singers Christina Aguilera and Renee Olstead from November 2010 to October 2011.
Chaney, who was initially charged with 28 counts related to hacking, struck a plea deal with prosecutors in March to nine felony counts, including wiretapping and unauthorized access to protected computers.
"I don't know what else to say except I'm sorry," Chaney said during his sentencing. "This will never happen again."
Chaney was ordered to pay $66,179 in restitution to victims.
Prosecutors recommended a 71-month prison for Chaney, who faced a maximum sentence of 60 years.
TEARFUL JOHANSSON
Prosecutors said Chaney leaked some of the private photos to two celebrity gossip websites and a hacker.
Johansson said the photos, which show her topless, were taken for her then-husband, actor Ryan Reynolds.
In a video statement shown in U.S. District Court in Los Angeles, a tearful Johansson said she was "truly humiliated and embarrassed" when the photos appeared online, asking Judge S. James Otero to come down hard on Chaney.
Prosecutors said Chaney also stalked two unnamed Florida women online, one since 1999 when she was 13 years old.
Chaney, a native of Jacksonville, Florida, was arrested in October 2011 after an 11-month FBI investigation dubbed "Operation Hackerazzi" and he continued hacking after investigators initially seized his personal computers.
Shortly after his arrest, Chaney told a Florida television station that his hacking of celebrity email accounts started as curiosity and later he became "addicted."
"I was almost relieved months ago when they came in and took my computer ... because I didn't know how to stop," he said.

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Egyptians vote on Islamist-backed constitution

CAIRO (AP) — Egyptians voted on Saturday in the second and final phase of a referendum on an Islamist-backed constitution that has polarized the nation, with little indication that the expected passage of the charter will end the political crisis in which the country is mired.
Islamist President Mohammed Morsi is likely to emerge from a bruising month-long battle with a narrow victory for the constitution he and his Islamist allies sought. But it has been at the cost of alienating many who had backed him, leaving an administration he has long tried to depict as broad-based even more reliant on the Muslim Brotherhood and other Islamists.
The liberal and secular opposition, in turn, has ridden a wave of anger among a significant part of the population against Morsi and the Brotherhood, who many feel are establishing a lock on power. But it has been unable to block a charter critics fear will bring greater implementation of Islamic law and it now faces the question of how to confront Morsi now.
Morsi faced more bleeding from his administration. Hours before polls closed, Morsi's vice president, Mahmoud Mekki, announced his resignation.
Shortly afterward, state TV reported the resignation of Central Bank Governor Farouq el-Oqdah. But then it carried a denial by the Cabinet that he had stepped down. No explanation was given for the conflicting reports, which come after several days of media report that the administration was trying to convince el-Oqdah not to quit his post, at a time when Egypt's pound has been losing value and a crucial deal for a much needed IMF loan of $4.8 billion has been postponed.
Mekki's move was in part expected since the new charter would eliminate the vice presidency post. But Mekki hinted that the hurried departure could be linked to Morsi's policies.
"I have realized a while ago that the nature of politics don't suit my professional background as a judge," his resignation letter, read on state TV, said. He said he had first submitted his resignation last month but events forced him to stay on.
Over the past month, seven of Morsi's 17 top advisers and the one Christian among his top four aides resigned. Like Mekki, they said they had never been consulted in advance on any of the president's moves, including Nov. 22 decrees placing him above any oversight and granting himself near absolute powers.
Saturday's vote is taking place in 17 of Egypt's 27 provinces with about 25 million eligible voters. The first phase on Dec. 15 produced a "yes" majority of about 56 percent with a turnout of some 32 percent, according to preliminary results.
Preliminary results for the second round are expected late Saturday or early Sunday. The charter is expected to pass, but a low turnout or relatively low "yes" vote could undermine perceptions of its legitimacy. There was no immediate word on Saturday's turnout, but in some places lines were short or non-existent.
For some, the vote was effectively a referendum on Morsi himself, who opponents accuse of turning the government into a monopoly for the Muslim Brotherhood.
In the village of Ikhsas in the Giza countryside south of Cairo, buses ferried women voters to the polling centers in an effort villagers said was by the Muslim Brotherhood.
An elderly man who voted "no" screamed in the polling station that the charter is "a Brotherhood constitution."
"We want a constitution in the interest of Egypt. We want a constitution that serves everyone, not just the Brotherhood. They can't keep fooling the people," 68-year-old Ali Hassan, wearing traditional robes, said.
But others were drawn by the hope that a constitution would finally bring some stability after nearly two years of tumultuous transitional politics following Egypt's 2011 revolution that removed autocrat Hosni Mubarak. Though few fault-lines in Egypt are black and white, there appeared to be an economic split in voting, with many of the middle and upper classes rejecting the charter and the poor voting "yes."
In Ikhsas, Hassan Kamel, a 49-year-old day worker, said "We the poor will pay the price" of a no vote.
He dismissed the opposition leadership as elite and out of touch. "Show me an office for any of those parties that say no here in Ikhsas or south of Cairo. They are not connecting with people."
As was the case in last week's vote, opposition and rights activists reported numerous irregularities: polling stations opening later than scheduled, Islamists outside stations trying to influence voters to say "yes," and independent monitors denied access.
For the past four weeks, both the opposition and the Islamists have brought giant crowds out into the streets in rallies — first over Morsi's grab of new powers, though they were since revoked, and then over the charter itself, which was finalized by a Constituent Assembly made up almost entirely of Islamists amid a boycott by liberal and Christian members.
The rallies and protests repeatedly turned in to clashes, killing at least 10 people and wounding more than 1,000. The most recent came on the eve of Saturday's voting, when Islamists and Morsi opponents battled each other for hours with stones in the Mediterranean city of Alexandria.
The promise of stability even drew one Christian woman in Fayoum, south of Cairo, to vote "yes" — a break with most Christians nationwide who oppose the draft. Hanaa Zaki said she wanted an end to Egypt's deepening economic woes.
"I have a son who didn't get paid for the past six months. We have been in this crisis for so long and we are fed up," said Zaki, waiting in line along with bearded Muslim men and Muslim women wearing headscarves in Fayoum, a province that is home to both a large Christian community and a strong Islamist movement.
In Giza's upscale Mohandiseen neighborhood, a group of 12 women speaking to each other in a mix of French, Arabic and English said they all intended to vote "no."
"My friends are Muslim and are voting 'no.' It's not about Christian versus Muslim, but it is Muslim Brotherhood versus everyone else," said one of them, Shahira Sadeq, a Christian physician.
Kamla el-Tantawi, 65, said she voted no "against what I'm seeing" — and she gestured at a woman nearby wearing the full-face veil known as niqab, a hallmark of ultraconservative Muslim women.
"I lose sleep thinking about my grandchildren and their future. They never saw the beautiful Egypt we did," she said, harkening back to a time decades ago when few women even wore headscarves covering their hair, much less the black niqab that blankets the entire body and leaves only the eyes visible.
In the neighboring, poorer district of Imbaba, Zeinab Khalil — a mother of three who wears the niqab — was backing the charter.
"Morsi, God willing, will be better than those who came before him," she said. "A 'yes' vote moves the country forward. We want things to calm down, more jobs and better education."
The voices reflected the multiple concerns that have been shaking Egypt for weeks. For some, the dispute has been about Shariah and greater religion in public life — whether to bring it about or block it. In many areas, clerics have been preaching in favor of the charter in their sermon.
But the dispute has also been about political power. An opposition made up of liberals, leftists, secular Egyptians and a swath of the public angered over Morsi's 5-month-old rule fear that Islamists are creating a new Mubarak-style autocracy.
Morsi's allies say the opposition is trying to use the streets to overturn their victories at the ballot box over the past two years. They also accuse the opposition of carrying out a conspiracy by former members of Mubarak's regime to regain power.
Many voters were under no illusions the turmoil would end.
"I don't trust the Brotherhood anymore and I don't trust the opposition either. We are forgotten, the most miserable and the first to suffer," said Azouz Ayesh, sitting with his neighbors as their cattle grazed in a nearby field in the Fayoum countryside.
He said a yes would bring stability and a no would mean no stability. But, he added, "I will vote against this constitution."
In Ikhsas village, Marianna Abdel-Messieh, a Christian, was the only woman not wearing a head scarf in the women's line outside a polling center. She was voting "no," but expected that whatever the result, Egypt would see more rule by Shariah.

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Russia welcomes any offer to give Assad refuge

BEIRUT (AP) — Russia would welcome any country's offer of safe haven for Syrian President Bashar Assad, but has no plans to make one of its own, Moscow's foreign minister said in the latest comments to suggest a growing distance between the two allies.
Sergey Lavrov's remarks on Friday night were among the clearest signs yet that Russia could be preparing for a Syria without Assad, as rebel pressure on the embattled leader intensifies. Over the past four weeks, fighting has reached Damascus, his seat of power, and rebels have captured a string of military bases.
Up to now, Russia has vetoed three Western-backed resolutions aimed at pressuring Syria's government to stop the violence that has killed more than 40,000 people over the past 21 months. While Russian leaders have given no concrete signs that stance has changed, their tone has shifted as rebels advance on the outskirts of the capital.
On Thursday, Russian President Vladimir Putin distanced himself further than ever from the Syrian president, saying Russia does not seek to protect him and suggesting his regime is growing weaker.
Speaking to reporters late Friday, Lavrov reiterated Moscow's position that "it doesn't invite President Assad here," although he said other countries had asked Russia to convey their offer of safe passage to Assad.
While he would not name the countries, Lavrov said Russia had responded by telling them to go directly to the Syrian leader.
"If there is anyone willing to provide him guarantees, they are welcome!" Lavrov said on board a plane returning from Brussels, where he attended a Russia-EU summit.
"We would be the first to cross ourselves and say: "Thank God, the carnage is over! If it indeed ends the carnage, which is far from certain."
Syria's conflict started in March last year as an uprising against Assad, whose family has ruled the country for four decades. But the bloody crackdown that followed led rebels to take up arms, and the ensuing fighting transformed into a civil war.
The regime has come under added condemnation in recent weeks as Western officials raise concerns Assad might use chemical weapons against rebels in an act of desperation.
Syria refuses to confirm or deny if it has such weapons but is believed to have nerve agents as well as mustard gas. It also possesses Scud missiles capable of delivering them.
Lavrov said the Syrian government has pulled its chemical weapons together to one or two locations from several arsenals across the country to keep them safe amid the rebel onslaught.
"According to the information we have, as well as the data of the U.S. and European special services, the government is doing everything to secure it," he said. "The Syrian government has concentrated the stockpiles in one or two centers, unlike the past when they were scattered across the country."
Lavrov added that U.N.-Arab League peace envoy for Syria, Lakhdar Brahimi, would visit Moscow for talks before the year's end.
The conflict's sectarian dimension looked set to deepen at the weekend, as rebels threated to storm two predominantly Christian towns in a central region if residents do not "evict" government troops they say are using the towns as a base to attack nearby areas.
A video released by rebels showed Rashid Abul-Fidaa, who identified himself as the commander of the Ansar Brigade for Hama province, calling on locals in Mahrada and Sqailbiyeh to rise up against Assad's forces or prepare for an assault.
"You should perform your duty by evicting Assad's gangs," said Abdul-Fidaa, who wore an Islamic headband and was surrounded by gunmen. "Otherwise our warriors will storm the hideouts of the Assad gangs."
He also accused regime forces of taking positions in the two towns in order to "incite sectarian strife" between Christians and the predominantly Sunni opposition. Assad belongs to the Alawite minority sect, an off-shoot of Shiite Islam.
The threat comes just two days after a U.N. team investigating human rights abuses in Syria accused anti-Assad militants of hiding among the civilian population, triggering strikes by government artillery and the air force.
The Britain-based Syrian Observatory for Human Rights, the activist group which reported the rebel ultimatum on Saturday, said such an attack by rebels could force thousands of Christians from their homes.
Christians, who make up about 10 percent of Syria's population, say they are particularly vulnerable to the violence sweeping the country of 22 million people. They are fearful that Syria will become another Iraq, with Christians caught in the crossfire between rival Islamic groups.
Clashes between troops and rebels in the central city of Homs, Syria's third largest, have already displaced tens of thousands of Christians, most of whom either fled to the relatively safe coastal areas or to neighboring Lebanon.
Rami Abdul-Rahman, who heads the Observatory, said some Christians and Alawites have also left Hama province in the past several days to escape violence. He said some of them found shelter in the coastal city of Tartus.
In Damascus, the new head of the Greek Orthodox Church of Antioch said that Christians in Syria had deep roots in the country and were not part of the conflict. Speaking to reporters in Damascus, Patriarch John X. Yazigi urged rival factions to negotiate a settlement.
Violence continued unabated on Saturday, particularly in the capital.
The Observatory said a car bomb went off in the Damascus neighborhood of Qaboun, killing at least five people and wounding others. A Syrian official confirmed the blast but had no immediate comment regarding casualties.
Elsewhere, the Syrian army said in a statement carried on state-run TV that it had repelled a rebel attack on a military base that killed a regimental commander in the Damascus suburb of Chebaa.
Also in Damascus, the state-run news agency SANA said gunmen assassinated a cameraman for the government's TV station, the latest such killing in recent months.
In another development, 11 rebel groups said they have formed a new coalition, the Syrian Islamic Front.
A statement issued by the new group, dated Dec. 21 and posted on a militant website Saturday, described it as "a comprehensive Islamic front that adopts Islam as a religion, doctrine, approach and conduct."
Several rebel groups have declared their own coalitions in Syria, including one calling itself an "Islamic state" in the embattled northern city of Aleppo.
The statement said the new group will work to avoid differences or disputes with the other Islamic groups.

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Bombing kills 4, wounds 11 in Iraq

BAGHDAD (AP) — An explosion at a shop selling CDs killed 4 people in a town northeast of the Iraqi capital Baghdad on Saturday.
Police officials say a bomb hidden in a plastic bag exploded near the shop Saturday afternoon in the town of Qazaniyah. Eleven people were wounded in the attack, and the shop was completely destroyed. Qazaniyah is 180 kilometers (110 miles) northeast of Baghdad.
A medic in a nearby hospital confirmed the death toll. All the officials spoke on condition of anonymity because they weren't authorized to brief reporters.
Violence has ebbed in Iraq, but insurgent attacks are still frequent.
The attack comes in the midst of growing political uncertainty.
Iraq's president Jalal Talabani, who was working to ease tensions between Iraq's Shiite Arab-led government and the Kurdish minority, suffered a stroke earlier this week and was flown to Germany for treatment. And on Thursday, Iraqi security forces arrested at least 10 guards assigned to the finance ministry, angering the Sunni minister and his political allies.
In the northern Kurdish region, Sunni parliament speaker, Osama al-Nujaifi met with the leader of the self-ruled Kurdish region, Massoud Barzani in order to discuss their response to the growing crisis.
In a statement after their meeting, both sides expressed their discontent with the arrests, calling on the central government to take into consideration the "delicate period Iraq is going through."

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Egypt's disputed charter headed toward approval

CAIRO (AP) — Egypt's Islamist-backed constitution headed toward likely approval in a final round of voting on Saturday, but the deep divisions it has opened up threaten to fuel continued turmoil.
Passage is a victory for Islamist President Mohammed Morsi, but a costly one. The bruising battle over the past month stripped away hope that the long-awaited constitution would bring a national consensus on the path Egypt will take after shedding its autocratic ruler Hosni Mubarak nearly two years ago.
Instead, Morsi disillusioned many non-Islamists who had once backed him and has become more reliant on his core support in the Muslim Brotherhood and other Islamists. Hard-liners in his camp are determined to implement provisions for stricter rule by Islamic law in the charter, which is likely to futher fuel divisions.
His liberal and secular opposition, in turn, faces the task of trying to organize the significant portion of the population angered by what they see as attempts by Morsi and the Brotherhood to gain a lock on political power. The main opposition group, the National Salvation Front, said it would now start rallying for elections for the next lawmaking, lower house of parliament, expected early next year.
"We feel more empowered because of the referendum. We proved that at least we are half of society (that) doesn't approve of all this. We will build on it," the Front's spokesman, Khaled Daoud, said. Still, he said, there was "no appetite" at the moment for further street protests.
Saturday's voting in 17 of Egypt's 27 provinces was the second and final round of the referendum. Though the constitution is widely expected to pass, the key questions will be over turnout and the margin of victory. Preliminary results from the first round a week ago showed only 32 percent turnout and a relatively low edge of 56 percent for the "yes" vote. Preliminary results from the second round are expected to emerge by early Sunday.
The new constitution would come into effect once official results are announced, expected in several days.
In a sign of disarray in Morsi's administration, his vice president and — possibly — the central bank governor resigned during Saturday's voting. Vice President Mahmoud Mekki's resignation had been expected since his post is eliminated under the new constitution. But its hasty submission even before the charter has been sealed and his own resignation statement suggested it was linked to Morsi's policies.
"I have realized a while ago that the nature of politics don't suit my professional background as a judge," his resignation letter, read on state TV, said. Mekki said he had first submitted his resignation last month but events forced him to stay on.
The status of Central Bank Governor Farouq el-Oqdah was murkier. State TV first reported his resignation, then soon after reported the Cabinet denied he has stepped down in a possible sing of confusion. El-Oqdah, in his post since 2003, has reportedly been seeking to step down but in recent weeks the administration was trying to convince him to stay on. The government is eager to show some stability in the economy as the Egyptian pound has been sliding and a much-needed $4.8 billion loan from the IMF has been postponed.
Over the past month, seven of Morsi's 17 top advisers and the one Christian among his top four aides resigned. Like Mekki, they said they had never been consulted in advance on any of the president's moves, including his Nov. 22 decrees, since rescinded, that granted himself near absolute powers.
Those decrees sparked large street protests by hundreds of thousands around the country, bringing counter-rallies by Islamists. The turmoil was further fueled with a Constituent Assembly almost entirely made up of Islamists finalized the constitution draft in the dead of night amid a boycott by liberals and Christians. Rallies turned violent. Brotherhood offices were attacked, and Islamists attacked an opposition sit-in outside the presidential palace in Cairo leading to clashes that left 10 dead.
The turmoil opened up a vein of bitterness that the polarizing constitution will do little to close. Morsi opponents accused him of seeking to create a new Mubarak-style autocracy. The Brotherhood accused his rivals of being former Mubarak officials trying to topple an elected president and return to power. Islamists branded opponents "infidels" and vowed they will never accept anything but "God's law" in Egypt.
Both rounds of voting saw claims by the opposition and rights groups of voting violations. On Saturday they said violations ranged from polling stations opening late to Islamists seeking to influence voters to say "yes." The official MENA news agency said at least two judges have been removed for coercing voters to cast "yes" ballots.
The opposition's talk of now taking the contest to the parliament elections represented a shift in the conflict — an implicit gamble that the opposition can try to compete under rules that the Islamists have set. The Brotherhood's electoral machine has been one of its strongest tools since Mubarak's fall, while liberal and secular parties have been divided and failed to create a grassroots network.
In the first post-Mubarak parliament elections last winter, the Brotherhood and ultraconservative Salafis won more than 70 percent of seats in the lower chamber, which was later dissolved by a court order. The opposition is now betting it can do better with the anger over Morsi's performance so far.
The schism in a country that has for decades seen its institutions function behind a facade of stability was on display in Saturday's lines of voters.
In the village of Ikhsas in the Giza countryside south of Cairo, an elderly man who voted "no" screamed in the polling station that the charter is "a Brotherhood constitution."
"We want a constitution in the interest of Egypt. We want a constitution that serves everyone, not just the Brotherhood. They can't keep fooling the people," Ali Hassan, a 68-year-old wearing traditional robes, said.
But others were drawn by the hope that a constitution would finally bring some stability after nearly two years of tumultuous transitional politics. There appeared to be a broad economic split, with many of the middle and upper classes rejecting the charter and the poor voting "yes" — though the division was not always clear-cut.
In Ikhsas, Hassan Kamel, a 49-year-old day worker, said "We the poor will pay the price" of a no vote.
He dismissed the opposition leadership as elite and out of touch. "Show me an office for any of those parties that say no here in Ikhsas or south of Cairo. They are not connecting with people."
In the industrial working class district of Shubra El-Kheima just north of Cairo, women argued while waiting in line over the draft charter.
Samira Saad, a 55 year old housewife, said she wanted her five boys to find jobs.
"We want to get on with things and we want things to be better," she said.
Nahed Nessim, a Christian, questioned the integrity of the process. "There is a lot of corruption. My vote won't count." She was taken to task by Muslim women wearing the niqab, which blankets the entire body and leaves only the eyes visible and is worn by ultraconservative women.
"We have a president who fears God and memorizes His words. Why are we not giving him a chance until he stands on his feet?" said one of the women, Faiza Mehana, 48.
The promise of stability even drew one Christian woman in Fayoum, southwest of Cairo, to vote "yes" — a break with most Christians nationwide who oppose the draft. Hanaa Zaki said she wanted an end to Egypt's deepening economic woes.
"I have a son who didn't get paid for the past six months. We have been in this crisis for so long and we are fed up," said Zaki, waiting in line along with bearded Muslim men and Muslim women wearing headscarves in Fayoum, a province that is home to both a large Christian community and a strong Islamist movement.
The scene In Giza's upscale Mohandiseen neighborhood was starkly different.
A group of 12 women speaking to each other in a mix of French, Arabic and English said they were all voting "no."
"It's not about Christian versus Muslim, it is Muslim Brotherhood versus everyone else," said one of them, Shahira Sadeq, a Christian physician.
Kamla el-Tantawi, 65, said she was voted "against what I'm seeing" — and she gestured at a woman nearby wearing the niqab.
"I lose sleep thinking about my grandchildren and their future. They never saw the beautiful Egypt we did," she said, harkening back to a time decades ago when few women even wore headscarves covering their hair, much less the black niqab.
Many voters were under no illusions the turmoil would end.
"I don't trust the Brotherhood anymore and I don't trust the opposition either. We are forgotten, the most miserable and the first to suffer," said Azouz Ayesh, sitting with his neighbors as their cattle grazed in a nearby field in the Fayoum countryside.
He said a "yes" would bring stability and a "no" would mean no stability. But, he added, "I will vote against this constitution."

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Muni tax break under threat from bipartisan scrutiny in congress

WASHINGTON (Reuters) - The tax break that U.S. states, cities and counties get on the bonds they issue is in growing jeopardy now that Republicans, in addition to Democrats, are considering limits on the exemption.
As part of the "fiscal cliff" negotiations to raise more federal government tax revenue, Republican lawmakers have joined Democrats in reevaluating the costly tax break, said Republican congressional aides and lobbyists.
Municipal bonds issued by states and localities are a $3.7 trillion U.S. market underpinned by a law that exempts their interest income from taxation. This allows states and localities to tap capital markets more cheaply than private-sector borrowers such as banks and corporations.
"The muni bond exemption is on the table, not only during tax reform, but also during the 'fiscal cliff,'" said Mike Nicholas of the Bond Dealers of America, a lobbying group for fixed-income securities dealers and banks.
That the tax break - deeply embedded in the economy and vital to state and local governments - would draw the interest of Republicans shows how far Washington has come in a short time in considering potentially dramatic tax-and-spending changes.
As the United States grapples with a huge budget deficit and a complex tax code that has not been revamped in 26 years, even once politically untouchable tax breaks are being questioned.
The "fiscal cliff" refers to sharp tax increases and spending cuts that take effect in 18 days unless Congress intervenes soon.
Some lawmakers from both parties are calling for a comprehensive tax code overhaul in 2013 and groups concerned with the muni bond exemption are worried.
"We have not felt this threat level being this real in a long time," said David Parkhurst, legislative director with the National Governors Association, which represents the leaders of U.S. states that rely heavily on the muni bond tax exemption.
SUBSIDIZING STATES, LOCALITIES
The exemption benefits bond investors on one side of the market and state and local governments on the other. Effectively a subsidy for states and localities, the muni exemption cost U.S. taxpayers about $26.2 billion in 2011.
President Barack Obama in 2011 included the exemption among items subject to his proposed 28-percent cap on deductions and other tax breaks for individuals earning more than $200,000.
That proposal alarmed muni bond issuers and investors, who were already on edge because of a proposal to kill the exemption entirely in 2010's Simpson-Bowles deficit reduction plan.
Now, Republicans are rethinking their traditional reluctance to tinker with muni bonds, largely because they want to find ways to increase federal revenues without raising tax rates.
Phasing out the muni bond tax break for individual taxpayers earning more than $200,000 could raise about $10 billion a year - or about $100 billion over a decade - Republican aides said.
In the fight over the "fiscal cliff," Republicans hope to refute Obama's argument that real deficit reduction cannot be achieved without raising tax rates on high-income Americans.
Senator Orrin Hatch, the top Republican on the Senate Finance Committee, said tax breaks of all sorts need to be weighed in the effort to raise revenue and cut the deficit, but that "they are not easy to get rid of."
FROM STATES TO SCHOOLS
New issuance of tax-exempt bonds is expected to hit about $400 billion in 2013, up from about $370 billion this year, according to investment bank Loop Capital Markets LLC.
Jurisdictions that issue tax-exempt bonds range from states to cities, counties and school districts. They defend the bonds as vital to transportation, infrastructure and other public projects, which would be threatened by an exemption roll-back.
"It certainly couldn't come at a worse time," New York State Comptroller Thomas DiNapoli told Reuters last week, referring to the devastation the region suffered during Hurricane Sandy.
"Even before the storm, we had tremendous infrastructure needs that localities were trying to address and now we're going to have even more."
It is unclear exactly what sort of limitations Republicans have in mind. The Obama proposal would apply to all bond issues.
Citigroup Inc muni bond strategist George Friedlander has estimated that Obama's cap, if enacted, would raise state and local government borrowing costs.
The "fiscal cliff" talks and a possible tax code overhaul next year pose "a clear and present danger" for muni bond issuers and investors, Friedlander said in a recent research report.

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Boehner plan would bring top U.S. income tax rate to 39.6 percent: source

WASHINGTON (Reuters) - House of Representatives Speaker John Boehner's latest "fiscal cliff" proposal to President Barack Obama would see the top income tax rates rise to 39.6 percent from 35 percent for those with net incomes above $1 million a year, according to a source familiar with the talks.
The source, who asked not to be identified, emphasized that the income tax rate increase would be in exchange for "significant entitlement reforms/spending cuts." Entitlement programs include Medicare and Medicaid healthcare for the elderly and poor and Social Security retirement benefits.
The White House has not accepted Boehner's proposal, according to another source. Under current law, the top tax rate is scheduled to rise to 39.6 percent on January 1, unless Congress extends the current 35 percent, as Republicans had been urging.

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House Republicans eye limited fiscal cliff bill

WASHINGTON (Reuters) - With time running short before a Dec. 31 deadline, House of Representatives Speaker John Boehner will begin work on legislation that simply would extend current low income tax rates for all families with incomes below $1 million a year, according to an aide.
Negotiations will continue with the White House on a broader tax and spending deal, the Boehner aide said.
Boehner is presenting the plan to rank-and-file Republicans in a closed-door session.
On January 1, income tax increases for most Americans will begin unless Congress acts.
Last July, the Democratic-controlled Senate passed a bill to extend the current low rates for all families with net incomes below $250,000 a year. The House Republican proposal, if passed by the House, would require agreement by the Senate or force a round of negotiations on a compromise between the two chambers.
In excerpts of remarks Boehner was delivering to his Republican members Tuesday morning, the speaker complained that "the White House just can't seem to bring itself to agree to a 'balanced' approach" to deficit-reduction in negotiations. At the same time, Boehner said Republicans were "leaving the door wide open for something better" than just the limited extension of current low tax rates for most Americans.
"Current law has tax rates going up on everyone January 1. The question for us is real simple: How do we stop as many of those rate hikes as possible?" Boehner said.
For months, Democrats have been urging House Republicans to pass a bill protecting middle-class taxpayers from a January 1 rate increase.

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Senator Reid rejects Boehner "fiscal cliff" backup plan

WASHINGTON (Reuters) - House Speaker John Boehner's backup plan that would simply extend low income tax rates for households with incomes below $1 million a year "cannot pass both houses of Congress," Senate Majority Leader Harry Reid said on Tuesday.
Reid, a Democrat, said Boehner instead should focus on reaching a broad deficit-reduction deal with President Barack Obama. "Now is the time to show leadership, not kick the can down the road," Reid said.
Last July, Reid's Democrats passed a bill in the Senate that would have continued low tax rates, which are set to expire on December 31, for families with net incomes below $250,000.

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White House defends offer as 'good faith effort'

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

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