Argentine court rejects intervention in media case

BUENOS AIRES, Argentina (AP) — Argentina's Supreme Court rejected a proposal by the government to use a new legal regulation to get the top court to intervene in the case of a law opposed by the country's top media group.
The Supreme Court on Thursday rejected a legal mechanism that allows the highest court to step into cases even when they're being handled by lower courts.
The court also accepted an injunction shielding Grupo Clarin from the new media law, which would force it to disinvest and partially break up the company, the state news agency Telam reported.
Grupo Clarin had appealed a ruling by a lower court judge who said that some parts of the three-year-old law against media monopolies are constitutional.

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Mexico City seeks beauty in public-space makeover

The plan is as big as this mammoth city: Turn a seedy metro hub into Mexico City's Times Square; clear swarms of feisty vendors and remodel the historic Alameda Central; illuminate the plazas and walkways of a park twice the size of New York's Central Park.
Mexico City's government is trying to transform one of the world's largest cities by beautifying public spaces, parks and monuments buried beneath a sea of honking cars, street hawkers, billboards and grime following decades of dizzying urban growth.
Despite the challenges, the ambitious, multimillion-dollar program carried out by former center-left Mayor Marcelo Ebrard and continued by his successor, Miguel Angel Mancera, is winning praise from urban planners and many residents. And it's turning the metropolis into an experiment in how to soften urban sprawl.
"It's time to tame the city," said Juan Carlos de Leo Gandara, head of the Iberoamerican University's sustainable urban projects. "Today is about giving the city back to pedestrians."
In the Alameda, made iconic in the Diego Rivera mural "Dream of a Sunday Afternoon in the Alameda," concrete sidewalks were replaced by marble, and makeshift vendor stands were kicked out — a renovation that cost about $18.7 million. Instead of a motley patchwork of folding tables and tarps, the newly opened park, anchored by the art nouveau Palacio de Bellas Artes theater, is a sea of greenery and calm in the midst of racing traffic.
"It used to be very dark, with no lighting. It really wasn't a place to bring my son," said Alma Rosa Romero, a 32-year-old housewife standing by the new dancing-water fountains, holding her child's hand. "Now it's beautiful."
Other completed projects include a once-neglected plaza with an Arc de Triumph-style monument to Mexico's 1910 revolution, which has been remade at a cost of $28.6 million from a homeless encampment to an oasis where families frolic and children run through spurts of water gushing out of the pavement. The copper dome of what started out as the country's Congress building is newly polished and gleaming.
Downtown, at the Chapel of the Immaculate Conception of Tlaxcoaque, the city has installed multi-colored fountains that light up at night and replaced a parking lot with a larger plaza for pedestrians. The city has also converted Francisco I. Madero street in the historic center into a pedestrian walkway stretching to the Zocalo, the plaza that's home to the National Palace and massive Metropolitan Cathedral. And under a popular bridge near the hip neighborhood of Condesa, the city made way for a taco joint and a playground.
"A city where people go out to the streets is safe, happier and raises the quality of life," said Daniel Escotto, chief architect of Mexico City's Public Areas Office, which was founded in 2008 to manage urban renewal. "We are renovating floors, facades and adding plants and lighting and more elements that can shape this concept."
Yet in a city defined in many ways by its disorder, the plan is also being slammed by those who take pride in surviving the urban jungle.
"Yes it's safer, and it's renovated, but what happens to the emblem of Mexico City?" said Baltazar Romeo, 47, a hospital worker eating a sandwich at the newly remodeled Alameda. Gone were the street performers who once dressed as the Three Wise Men during Christmas and charged tips for photos with children. "The city is becoming soulless," Romeo said.
One of the flagship renovation projects is the once-seedy, swarming Glorieta de Insurgentes, a roundabout and metro station in central Mexico City that sees hundreds of thousands of commuters pour through every day.
The circular plaza was sunk to let pedestrians stream below busy thoroughfares and catch their trains or buses or just hang out. Around its rim careen cars in a roundabout that briefly merges two of the city's biggest thoroughfares, the mighty Insurgentes and Chapultepec avenues.
When the plaza was built in 1969, the city's top priority was moving an onslaught of cars and people from one point to another. Highways and beltways elsewhere went up to cope with the population boom, and sprawl spread farther out. Once-famous and safe streets and plazas suffered from neglect by planners and became slum-like neighborhoods people avoided after sunset. A brown haze covered the new skyline as motorists became the focus of the new infrastructure.
The Insurgentes roundabout turned into a place to hurry through. Homeless people took over abandoned warehouses nearby while surrounding office and apartment buildings fell into disrepair. Many of the plaza's shops became sleazy Internet cafes cowering beneath giant billboards.
"It couldn't be more hostile to public life or pedestrian life," said Ken Greenberg, a Toronto-based architect and urban designer who recently visited Mexico. "The whole thing just has a kind of very harsh feeling of a highway right in the middle of the city."
Urban designers are now seeking to infuse the chaos with the glitzy excitement of Times Square or London's Piccadilly Circus. Sixty-foot cylinders covered with circular screens streaming LED tickers have already been erected. The crabgrass-filled flower beds and low benches used as skateboard launches have been bulldozed for a sleek open-air look bathed in white, patterned concrete.
The makeover is meant to create a more appealing space for commuters using bikes and public transit in a city that won infamy as the world's most painful for commuters in a 2011 IBM survey.
"What Mexico City needs is to emphasize its identity through its public spaces," Escotto said.
The government says the Insurgentes project will also debut a new model for restricting advertising to designated spots. In 2010, local government banned advertisements on all public and private buildings, threatening a $9,000 fine for those who refused to comply. Two years later, however, the city is still blanketed by billboards.
Future projects include a cleanup of 67 bridges around the city and more lighting for plazas and walkways throughout Chapultepec Park, Mexico City's grand urban green space.
Some projects, including the Insurgentes roundabout, are being completed with the help of private funds. The roundabout renovation includes $4.5 million from 15 advertising companies that are erecting the giant LED screens. Critics worry the arrangement will benefit private companies more than city residents. Much of the beautification of the historic center was paid for by telecommunications billionaire Carlos Slim.
Some wonder whether Mancera, who is from Ebrard's party, will continue the effort and whether the city has the money to maintain its improvements. The question for this teeming city is whether its attempt to clean up will hold or whether the sprawl will ultimately prove more powerful.
"How is this work going to look in the next five months, or five years?" asked De Leo Gandara of the Iberoamerican University. "Will they preserve it? Will it still be clean? Are they keeping it together or is it forgotten again?"

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Argentina's fight on defaulted debt takes new step

It's been a decade since Argentina tarnished its reputation worldwide and became an economic misfit by engaging in the biggest sovereign debt default in history, yet it is still haunted by the old bonds.
Although Argentina's government restructured nearly all of the debt defaulted in the 2001 economic crisis, President Cristina Fernandez finds herself in a bitter U.S. court fight with holdout creditors that has raised the threat of severe financial repercussions.
The next step comes Friday when Argentina files its arguments for the final stage in its legal battle with NML Capital Ltd., an investment fund that specializes in suing over unpaid sovereign debts.
Argentina recently sidestepped economic chaos from the debt showdown when the 2nd U.S. Circuit Court of Appeals suspended a lower court's order for Argentina to pay $1.3 billion into escrow for holders of its defaulted debt, an action that risked pushing the country into technical default.
U.S. District Judge Thomas Griesa based his ruling on the principle of "pari passu," or equal footing, which says debtors can't pick and choose between creditors. In other words: pay everyone or pay no one and risk going into default.
Fernandez has refused to make such a payment, and uses the term "vulture funds" when she talks about NML Capital and others who have refused two opportunities to swap defaulted bonds for new, less valuable bonds that the government has reliably paid since 2005.
Analysts and Argentine media say Fernandez's legal team may argue that Griesa's ruling would hurt the world's financial system by giving financial speculators an enormous edge over nations that need to restructure debts and protect their citizens while trying to grow their way out of economic crises.
"Ninety-three percent of bondholders accepted the restructurings so, given the international situation, it would be irrational to rule in favor of the 'vulture funds' and pay them 100 percent," said Mariano Lamothe, an analyst with the consulting firm abeceb.com. "It would break any possibility of (future) debt swaps. Nobody would issue a bond in the New York Stock Exchange."
Other analysts support the debt holdouts.
Speaking during a teleconference Thursday organized by a lobbying group funded by NML Capital, legal experts expressed skepticism that such an argument would prevail.
"Argentina's claim that the pari passu clause will cause chaos in world markets is inaccurate," said Richard Samp, chief counsel for the Washington Legal Foundation. "The 2nd Circuit specifically recognized that Argentina is a unique case, and that sovereign debtors can avoid Argentina's predicament by including non-voluntary collective action clauses in their bondholder agreements, like Greece has done in the past."
John Baker Jr., a visiting fellow at Oriel College at University of Oxford, said debt contracts would become irrelevant if Argentina's position prevails.
"The 2nd Circuit should be applauded for determining that Argentina must be bound by its contractual commitment to treat creditors equally, and Argentina's claims that holdouts do not deserve to be paid are a clear strategy meant to continue avoiding the payment of billions of dollars it owes bondholders," Baker said.
Fernandez insists she won't pay a single centavo to the holdouts and calls Griesa's ruling "judicial colonialism." But analysts say that despite the government's tough public stance, Fernandez may be looking for time to negotiate over a new debt swap and avoid a new blow to the country's financial reputation.
"In Argentina there's a huge abyss between the official discourse and public policy," said Miguel Braun, an economist for the Buenos Aires-based Pensar consulting firm. "I wouldn't be surprised if Fernandez is saying all of this in her speeches and then goes on and does something completely different."
Just the threat of the Dec. 15 payment deadline set by Griesa had severe consequences. In the week after Griesa issued his order, the cost of maintaining Argentina's overall debt soared in trading on U.S. and European bond markets and the cost of insuring those debts spiked.
Several weeks ago, her administration struck a more conciliatory tone by saying it might be willing to pay the holdouts on the same terms as investors who joined the last debt restructuring in 2010. NML Capital and other plaintiffs have not commented on whether they would be willing to accept a swap on those terms.
The amount at stake in the current litigation is $1.3 billion, but all of the old bonds held by investors who didn't accept the debt restructuring total about $11.2 billion. If the U.S. courts eventually uphold Griesa's ruling, all those investors could demand immediate payment.
Ramiro Castineira, an analyst for the consulting firm Econometrica, sees a possibility that the courts may rule in favor of the "vulture funds" but also allow a more favorable schedule of payments for Argentina.
"There's a lot of uncertainty," Castineira said. "Whatever the court rules, both sides are going to appeal and try to take it to the Supreme Court, which must decide if it takes the case or not."

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BUENOS AIRES, Argentina (AP) — A former Argentine economy minister has been sentenced to four years in prison for corruption. Felisa Miceli was forced to quit in 2007 when a bag of money holding $32,000 was found in her office toilet. The unanimous ruling said Miceli was guilty of the "aggravated cover up" on an illegal financial maneuver and obstruction of justice for getting rid of a police report on the money bag. A local court also ruled Thursday that Miceli will be barred from holding any public office position for eight years. Miceli served under President CrVP reads message from ailing Chavez to military istina Fernandez's husband and predecessor, former President Nestor Kirchner.

CARACAS, Venezuela (AP) — In a message read by his No. 2, President Hugo Chavez saluted Venezuela's military and acknowledged he was facing "complicated and difficult" times as he recovers from cancer surgery in Cuba.
The message read by Vice President Nicolas Maduro during a military event in eastern Venezuela offered no details on Chavez's condition and it was unclear when the president composed it. Chavez, 58, has not been seen or heard from since undergoing his fourth cancer-related surgery in Havana on Dec. 11.
"I have had to battle again for my health," the president said in the message. He expressed "complete faith in the commitment and loyalty that the revolutionary armed forces are showing me in this very complicated and difficult moment."
There have been no new updates on Chavez's condition since Maduro announced Monday night that he had received a phone call from the president who was up and walking.
Maduro and other government officials have tried to drill optimism into their supporters at raucous events nearly every day since. But uncertainty about Venezuela's political future has grown with no guarantee that Chavez will be back in time for his scheduled Jan. 10 inauguration for a new six-year term.
A group of opposition candidates demanded Friday that Maduro provide an official medical report on Chavez's health. Lawmaker Dinorah Figuera said the country needs "a medical report from those who are responsible for the diagnosis, evaluation and treatment of the president."
"The Venezuelan people deserve official and institutional information," Figuera told Venezuelan media.
Before leaving for Cuba, Chavez acknowledged the precariousness of his situation and designated Maduro his successor, telling supporters they should vote for the vice president if new elections are necessary.
But a legal fight is brewing over what should happen if Chavez, who was re-elected in October, cannot return in time for the inauguration before the National Assembly.
National Assembly Diosdado Cabello insisted Monday that the Venezuelan Constitution allows the president to take the oath before the Supreme Court at any time if he cannot do it before the legislature on Jan. 10.
Opposition leaders argue the constitution requires that new elections be held within 30 days if Chavez cannot take office Jan. 10. They have criticized the confusion over the inauguration as the latest example of the Chavez government's disdain for democratic rule of law and have demanded clarity on whether the president is fit to govern.

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Former Argentine economy minister sentenced

BUENOS AIRES, Argentina (AP) — A former Argentine economy minister has been sentenced to four years in prison for corruption.
Felisa Miceli was forced to quit in 2007 when a bag of money holding $32,000 was found in her office toilet.
The unanimous ruling said Miceli was guilty of the "aggravated cover up" on an illegal financial maneuver and obstruction of justice for getting rid of a police report on the money bag.
A local court also ruled Thursday that Miceli will be barred from holding any public office position for eight years.
Miceli served under President Cristina Fernandez's husband and predecessor, former President Nestor Kirchner.

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House Republicans say resigned to tax hike in fiscal cliff

 Republicans in the U.S. House of Representatives are resigned to seeing some sort of income tax increase in legislation to avoid a "fiscal cliff," but such efforts could be doomed in the absence of spending cuts, some Republican lawmakers say.
Congress and President Barack Obama are gearing up for a last-ditch attempt to avoid $600 billion in tax increases and spending cuts that could halt progress in the U.S. economy, which lately has been showing signs of gaining ground.
The White House said Obama will host a meeting on Friday with the four top congressional leaders - Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell, House of Representatives Speaker John Boehner and House Minority Leader Nancy Pelosi. The Republicans have a majority in the House, while Obama's Democrats control the Senate.
House Speaker John Boehner informed his 241 Republican members on Thursday that the House would come back into session late on Sunday in anticipation of possible fiscal-cliff votes.
This Sunday's session "was about the only thing decided" during a half-hour conference call among House Republicans, said Representative Jeff Flake of Arizona, who will leave the House at the year-end to join the Senate.
In an interview shortly after the phone call, Flake said Republicans in the House and Senate were resigned to seeing some sort of increase in top income-tax rates, although he did not specify a dollar threshold.
While he said he did not want to see any income tax rates go up, Flake said: "I've felt we should've moved a week or two ago to accept the top rate going up and tell the president 'congratulations.'"
The bigger problem in avoiding the fiscal cliff, Flake said, would be if Obama demanded cancellation of the $109 billion in automatic spending cuts set to begin on January 2 without alternative spending cuts to replace them.
"There will be resistance from a lot of House conservatives to a deal that does that," Flake said.
Asked if the days leading up to next Monday, December 31 could thus be fruitless, Flake said, "That is what I am afraid of."
A Senate Democratic aide did not discount the possibility of some spending cuts being included in a limited bill to avert the fiscal cliff - even if they fell far short of the $1 trillion or so in cuts over 10 years that at one point was being discussed in talks between Boehner and Obama.
'TIRED OF WAITING'
Representative Tom Cole of Oklahoma, who also participated in Thursday's House Republican conference call, said its overarching theme was that the Senate should take the bill passed by the House earlier this year to extend all expiring income tax rates and amend it in a way senators see fit.
The House could then either accept that measure, or amend it, and bounce it back to the Senate.
"People are tired of waiting on the Senate to do things," Cole said.
Senate Democrats counter that last July they passed a bill extending the Bush-era tax cuts - except on net household income above $250,000 a year.
Nevertheless, the Senate must still couple its tax-cut bill with Obama's request for extending jobless benefits and possibly some other budget or tax measures.
"I assume the House would want to come back on Sunday knowing that we (the Senate) were going to do something on Friday or Saturday," said Senator Roy Blunt of Missouri, a member of the Senate's Republican leadership.
House Republican leaders informed their members that the chamber could stay in session dealing with the fiscal cliff through Wednesday, January 2 - the last day of the current Congress and a day before the new Congress is sworn in.
Cole said Boehner "made very apparent he is not interested in passing a bill that didn't have a majority of Republicans" supporting it.
But Cole said this was "not quite as elusive to achieve" as many people thought. He said Boehner had "over 200 votes" out of 241 Republicans for his failed "Plan B" - a bill extending lower tax rates except for millionaires - which everyone knew would not become law.
Thus, a bill with prospects of being enacted could attract more support, Cole suggested.
If a new bill came to the House floor to raise taxes on upper incomes, Boehner could force passage with a combination of Democratic and Republican votes.
With public opinion polls showing that Republicans would get most of the blame if the country were to go over the fiscal cliff, some House Republicans have become nervous about their political fortunes.
Both Flake and Cole told Reuters that during Thursday's conference call, some Republicans urged Boehner to bring the House back to Washington sooner than Sunday - a request Flake described as being aimed at improving the "optics" of House Republicans being absent from Washington so close to the December 31 deadline.
But Boehner stuck with his promise to give members at least 48 hours notice of a return.
Cole remained upbeat about a positive end to the fiscal-cliff mess that has gripped Washington for two months now.

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French government says will propose a rejigged 75 percent tax plan

 The French government will redraft a proposal for a 75 percent upper income tax band and resubmit it, the prime minister's office said on Saturday, after the Constitutional Council rejected the measure included in the 2013 budget.
"It will be presented as part of the next budget law," Prime Minister Jean-Marc Ayrault's office said in a statement, without giving a time frame. The statement said the Council's rejection of the 75 percent tax would not affect efforts to trim the public deficit.

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French court rejects 75 percent millionaires' tax

PARIS (Reuters) - France's Constitutional Council on Saturday rejected a 75 percent upper income tax rate to be introduced in 2013 in a setback to Socialist President Francois Hollande's push to make the rich contribute more to cutting the public deficit.
The Council ruled that the planned 75 percent tax on annual income above 1 million euros ($1.32 million) - a flagship measure of Hollande's election campaign - was unfair in the way it would be applied to different households.
Prime Minister Jean-Marc Ayrault said the government would redraft the upper tax rate proposal to answer the Council's concerns and resubmit it in a new budget law, meaning Saturday's decision could only amount to a temporary political blow.
While the tax plan was largely symbolic and would only have affected a few thousand people, it has infuriated high earners in France, prompting some such as actor Gerard Depardieu to flee abroad. The message it sent also shocked entrepreneurs and foreign investors, who accuse Hollande of being anti-business.
Finance Minister Pierre Moscovici said the rejection of the 75 percent tax and other minor measures could cut up to 500 million euros in forecast tax revenues but would not hurt efforts to slash the public deficit to below a European Union ceiling of 3 percent of economic output next year.
"The rejected measures represent 300 to 500 million euros. Our deficit-cutting path will not be affected," Moscovici told BFM television. He too said the government would resubmit a proposal to raise taxes on high incomes in 2013 and 2014.
The Council, made up of nine judges and three former presidents, is concerned the tax would hit a married couple where one partner earned above a million euros but it would not affect a couple where each earned just under a million euros.
UMP member Gilles Carrez, chairman of the National Assembly's finance commission, told BFM television, however, that the Council's so-called wise men also felt the 75 percent tax was excessive and too much based on ideology.
FRANCE UNDER SCRUTINY
Hollande shocked many by announcing his 75 percent tax proposal out of the blue several weeks into a campaign that some felt was flagging. Left-wing voters were cheered by it but business leaders warned that talent would flee the country.
Set to be a temporary measure until France is out of economic crisis, the few hundred million euros a year the tax was set to raise is a not insignificant sum as the government strives to boost public finances in the face of stalled growth.
Hollande's 2013 budget calls for the biggest belt-tightening effort France has seen in decades and is based on a growth target of 0.8 percent, a level analysts view as over-optimistic.
Fitch Ratings this month affirmed its triple-A rating on France but said there was no room for slippage. Standard & Poor's and Moody's have both stripped Europe's No. 2 economy of its AAA badge due to concern over strained public finances and stalled growth.
The International Monetary Fund recently forecast that France will miss its 3 percent deficit target next year and signs are growing that Paris could negotiate some leeway on the timing of that goal with its EU partners.
The INSEE national statistics institute this week scaled back its reading of a return to growth in the third quarter to 0.1 percent from 0.2 percent, and the government said it could review its 2013 outlook in the next few months.
Saturday's decision was in response to a motion by the opposition conservative UMP party, whose weight in fighting Hollande's policies has been reduced by a leadership crisis that has split it in two seven months after it lost power.
The Constitutional Council is a politically independent body that rules on whether laws, elections and referenda are constitutional.

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Rejected French tax measures worth 300-500 million euros: finance minister

The French Constitutional Council's rejection on Saturday of a 75 percent upper income tax rate and other minor measures in the 2013 budget will affect some 300-500 million euros worth of tax revenues, Finance Minister Pierre Moscovici said.
"The rejected measures represent 300 to 500 million euros. Our deficit-cutting path will not be affected," Moscovici told BFM television.
He added that the Socialist government would resubmit a proposal to raise taxes on high incomes in 2013 and 2014.

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AP Sources: 'Fiscal cliff' deal emerging

 Working with Congress against a midnight deadline, President Barack Obama said Monday that a deal to avert the "fiscal cliff" was in sight but not yet finalized. The emerging deal would raise tax rates on family income over $450,000 and individual income over $400,000 a year, increase the estate tax rate and extend unemployment benefits for one year.
"There are still issues left to resolve but we're hopeful Congress can get it done," Obama said at a campaign-style event at the White House. "But it's not done."
In the building New Year's Eve drama, the parties still were at an impasse over whether to put off the automatic, across-the-board spending cuts set to take effect at the beginning of the year and if so, how to pay for that.
One official said talks were focused on a two-month delay in the across-the-board cuts but negotiators had yet to agree on about $24 billion in savings from elsewhere in the budget. Democrats had asked for the cuts to be put off for one year and be offset by unspecified revenue.
The president said that whatever last-minute fixes are necessary, they must come from a blend of tax revenue and constrained spending, not just budget cuts.
And a little more than an hour after Obama spoke, Senate Republican leader Mitch McConnell said it was time to decouple the two major issues.
"We'll continue to work on smarter ways to cut spending, but let's not let that hold up protecting Americans from a tax hike that will take place in about ten hours," he said.
Officials emphasized that negotiations were continuing and the emerging deal was not yet final. And a confident Obama, flanked by cheering middle class Americans in a White House auditorium, jabbed Congress, saying lawmakers were prone to last-minute delays.
"One thing we can count on with respect to this Congress is that if there's even one second left before you have to do what you're supposed to do, they will use that last second," he said.
Speaking shortly afterward on the Senate floor, Sen. John McCain said that "at a time of crisis, on New Year's Eve...you had the president of the United States go over and have a cheerleading, ridiculing-of-Republicans exercise." The Arizona Republican lost the 2008 presidential race to Obama.
Unless an agreement is reached and approved by Congress at the start of the New Year, more than $500 billion in 2013 tax increases will take effect immediately and $109 billion in cuts will be carved from defense and domestic programs
Though the tax hikes and budget cuts would be felt gradually, economists warn that if allowed to fully take hold, their combined impact — the so-called fiscal cliff — would rekindle a recession.
The current proposal in the works would raise the tax rates on family income over $450,000 and individual income over $400,000 from 35 percent to 39.6 percent, the same level as under former President Bill Clinton. Also, estates would be taxed at 40 percent after the first $5 million for an individual and $10 million for a couple, up from 35 percent to 40 percent.
Unemployment benefits would be extended for one year. Without the extension, 2 million people would lose benefits beginning in early January.
A Republican official familiar with the plans confirmed the details described to The Associated Press.
The officials requested anonymity in order to discuss the internal negotiations.
The president said his hopes for a larger, more sweeping deal have been dashed and said that such an accommodation was not possible "with this Congress at this time."
But even with this fight not finished, Obama warned Republicans, specifically, about the battles still ahead. He said he would not accept any debt-reduction deals in the new year that rely on slashing spending without raising taxes, too. Cuts alone won't happen anymore "at least as long as I'm president, and I'm going to be president for the next four years."
Urgent talks were continuing Monday afternoon between the White House and congressional Republicans, with longtime negotiating partners Vice President Joe Biden and Senate Republican leader Mitch McConnell at the helm. Underscoring the flurry of activity, another GOP aide said the two men had conversations at 12:45 a.m. and 6:30 a.m. Monday.
An agreement on the proposed deal would also shield Medicare doctors from a 27 percent cut in fees and extend tax credits for research and development, as well as renewable energy.
The deal would also extend for five years a series of tax credits meant to lessen the financial burden on poorer and middle-class families, including one credit that helps people pay for college.
The deal would achieve about $600 billion in new revenue, the officials said.
Despite the progress in negotiations, Senate Majority Leader Harry Reid warned that time was running out to finalize the deal.
"Americans are still threatened with a tax hike in just a few hours," said Reid, D-Nev., as the Senate began an unusual New Year's Eve session.
Liberal Sen. Tom Harkin, D-Iowa, took to the Senate floor after Reid to warn Democratic bargainers against lowering levies on large inherited estates and raising the income threshold at which higher tax rates would kick in.
"No deal is better than a bad deal. And this look like a very bad deal the way this is shaping up," said Harkin.
Letting tax rates rise for couples with incomes of $450,000 a year is a concessions for Obama, who campaigned for re-election on a pledge to set the levels at $200,000 for individuals and $250,000 for couples. It also marked a significant concession by Republican leaders who pledged to continue the George W. Bush-era tax cuts for all income earners. .
The hope of the White House and lawmakers was to seal an agreement, enact it and send it to Obama for his signature before taxpayers felt the impact of higher income taxes or federal agencies began issuing furloughs or taking other steps required by spending cuts.
Regardless of the fate of the negotiations, it appeared all workers would experience a cut in their take-home pay with the expiration of a two-year cut in payroll taxes.
In a move that was sure to irritate Republicans, Reid was planning — absent a deal — to force a Senate vote Monday on Obama's campaign-season proposal to continue expiring tax cuts for all but those with income exceeding $200,000 for individuals and $250,000 for couples.
As the New Year's Eve deadline rapidly approached, Democrats and Republicans found themselves at odds over a host of issues, including taxing large inherited estates. Republicans wanted the tax left at its current 35 percent, with the first $5.1 million excluded, while Democrats wanted the rate increased to 45 percent with a smaller exclusion.
The two sides were also apart on how to keep the alternative minimum tax from raising the tax bills of nearly 30 million middle-income families and how to extend tax breaks for research by business and other activities.
Republicans were insisting that budget cuts be found to pay for some of the spending proposals Democrats were pushing.
These included proposals to erase scheduled defense and domestic cuts exceeding $200 billion over the next two years and to extend unemployment benefits. Republicans complained that in effect, Democrats would pay for that spending with the tax boosts on the wealthy.
"We can't use tax increases on anyone to pay for more spending," said Sen. Kay Bailey Hutchison, R-Texas.

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