Marcellus natural gas production expanded in 2012

Though Shell said it's still a few years away from a final decision to build, the project was sweetened by a huge package of state tax incentives. Corbett, legislators from both parties, and some union leaders supported credits of $66 million a year, which could total about $1.7 billion if the project is built. That would be Pennsylvania's largest financial incentive package ever.

In response to public concerns, major regulatory changes were made in 2012 at both the state and federal level.

Representatives of seven municipalities said Act 13 takes away their ability to control gas drilling operations through local zoning, leaving them defenseless to protect homeowners, parks and schools from being surrounded by drilling sites or waste pits. The municipalities, with support from environmental groups, filed a lawsuit challenging portions of the law, and the State Supreme Court heard arguments in October. There's no indication of when the court will issue a ruling.

In March, Shell Oil Co. said a site about 30 miles north of Pittsburgh was its first choice to build a huge new petrochemical plant, which would turn natural gas liquids into consumer products such as plastics and antifreeze.

On some fronts, there was evidence that regulatory and industry changes are helping to reduce pollution. Researchers said in November that high levels of an ultra-salty compound that could be linked to oil and gas drilling had declined in the Monongahela River, even as they persisted in the nearby Allegheny River's Pittsburgh-area watershed. State officials credit a voluntary ban on disposal of such waste that shale gas drillers agreed to. But environmental groups point out that conventional oil and gas drillers are still allowed to take such waste to riverside treatment plants, and called for the ban to be extended.

PITTSBURGH (AP) -- This year was one of new records and new questions for the boom in Marcellus Shale natural gas drilling.

Marcellus natural gas production expanded in 2012

Previous doubts about the size of the vast resource were mostly put to rest, as data showed that the Marcellus became the most productive natural gas field in the nation, even though well drilling slowed substantially.

According to the federal energy reports Marcellus wells in Pennsylvania and West Virginia now produce 7 billion cubic feet of gas per day. That's about 25 percent of all shale gas production nationwide, and nearly double the Marcellus production of the previous year.

The fight over perhaps the most high-profile case of pollution that was linked to Marcellus drilling wound down, too.

"The relative fortunes of the United States, Russia, and China — and their ability to exert influence in the world — are tied in no small measure to global gas developments," Harvard University's Kennedy School of Government concluded in a report last summer.

At the federal level, the U.S. Environmental Agency filed new rules concerning methane and other pollutants that can be emitted as air pollution. The strict new regulations won't take effect until 2015, but many drilling and energy companies said they've already made necessary upgrades, or are in the process of doing so.

But even though many welcomed the money, there were still battles.

In February, Gov. Tom Corbett signed Act 13, a wide-ranging bill that ended Pennsylvania's distinction as the nation's largest gas-producing state with no tax or levy on the activity. The 174-page bill imposed an impact fee, toughened safety standards and limited the ability of local officials to keep drilling out of their towns.

The Marcellus could contain "almost half of the current proven natural gas reserves in the U.S," a report from Standard & Poor's said, while other experts noted the powerful combination of resource, cost and location is altering natural gas prices and market trends across the nation. In other words, natural gas that used to come all the way from the Gulf Coast or Canada to feed the power-hungry Northeast is now coming from Marcellus producers.

The industry and many federal and state officials say the practice is safe when done properly, but environmental groups and some scientists say there hasn't been enough research on these issues.

But aside from the ongoing legal and regulatory battles, the steady production of huge amounts of gas fueled even bigger dreams, and talks that the resource will have a global impact.

By October, $204 million from gas industry payments was being distributed to state agencies and counties and municipalities that host gas wells.

In August, court documents showed that residents of a northeastern Pennsylvania town who say their well water was poisoned by a gas driller agreed to a confidential settlement with Houston-based Cabot Oil & Gas Corp. Soon afterward, the Department of Environmental Protection said Cabot had met its obligations under a 2010 consent agreement and will be permitted to put seven previously drilled wells in Dimock Township back in production. That's a rural area in northeastern Pennsylvania.

The Marcellus Shale lies under parts of Pennsylvania, Ohio, West Virginia, Maryland and New York. The procedure called hydraulic fracturing, or fracking, has made it possible to tap into deep reserves of oil and gas but the boom in shale gas fracking has raised concerns about pollution. Large volumes of water, along with sand and hazardous chemicals, are injected underground to break rock apart and free the oil and gas.

Newtown observes Christmas amid signs of mourning

The church program said flowers were donated in honor of Sandy Hook shooting victims, identified by name or as the "school angels" and "Sandy Hook families."

And on Christmas Day, out-of-town police officers were on duty to give police here a break.

CHASE KOWALSKI, 7: Chase was always…

Newtown observes Christmas amid signs of mourning
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FILE - In this Thursday, Dec. 20,…

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The service, which generally took on a celebratory tone, made only a few vague references to the shooting. Pastor Kathie Adams-Shepherd led the congregation in praying "that the joy and consolation of the wonderful counselor might enliven all who are touched by illness, danger, or grief, especially all those families affected by the shootings in Sandy Hook."

Connecticut's Bria Hartley leaves…

"It's a nice thing that they can use us this way," Ted Latiak, a police detective from Greenwich, Conn., said Christmas morning, as he and a fellow detective, each working a half-day shift, came out of a store with bagels and coffee for other officers.

"We seek not to be the town of tragedy," said Rabbi Shaul Praver of Congregation Adath Israel. "But, we seek to be the town where all the great changes started."

"These were his mother's guns," Scinto said. "Why would anyone want an assault rifle as part of a private citizen collection?"

At the Trinity Episcopal Church, an overflow crowd of several hundred people attended Christmas Eve services. They were greeted by the sounds of a children's choir echoing throughout a sanctuary hall that had its walls decorated with green wreaths adorned with red bows.

The outpouring of support for this community continued through Christmas Eve, with visitors arriving at town hall with offerings of cards, handmade snowflakes and sympathy.

"We know that they'll feel loved. They'll feel that somebody actually cares," said Treyvon Smalls, a 15-year-old from a few towns away who arrived bearing hundreds of cards and paper snowflakes collected from around the state.

Recalling the events at Sandy Hook Elementary School on Dec. 14, the Rev. Robert Weiss said: "The moment the first responder broke through the doors we knew good always overcomes evil."

Since the shooting, messages similar to the ones delivered Monday have arrived from around the world. People have donated toys, books, money and more. A United Way fund, one of many, has collected $3 million. People have given nearly $500,000 to a memorial scholarship fund at the University of Connecticut.

In the center of Newtown's Sandy Hook section Monday, a steady stream of residents and out-of-towners snapped pictures, lit candles and dropped off children's gifts at an expansive memorial filled with stuffed animals, poems, flowers, posters and cards.

At St. Rose of Lima Roman Catholic Church, which eight of the child victims of the massacre attended, the pastor told parishioners Tuesday at the second of four Masses that "today is the day we begin everything all over again."

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NEWTOWN, Conn. (AP) — Newtown observed Christmas amid snow-covered teddy bears, stockings, flowers and candles left in memorial to the 20 children and six educators gunned down at an elementary school just 11 days before the holiday.

"All the families who lost those little kids, Christmas will never be the same," said Philippe Poncet, a Newtown resident originally from France. "Everybody across the world is trying to share the tragedy with our community here."

Police say the gunman, Adam Lanza, killed his mother in her bed before his rampage and committed suicide as he heard officers arriving. Authorities have yet to give a theory about his motive.

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FILE - In this Tuesday, Dec. 18,…

A mediator who worked with Lanza's parents during their divorce has said Lanza, 20, was diagnosed with Asperger's syndrome, an autism-like disorder that is not associated with violence. It is not known whether he had other mental health issues. The guns used in the shooting had been purchased legally by his mother, Nancy Lanza, a gun enthusiast.

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Praver and Scinto said they are not opposed to hunting or to having police in schools, but both said something must be done to change what has become a culture of violence in the United States.

Associated Press writers Pat Eaton-Robb, John Christoffersen and Katie Zezima contributed to this report.

"We know Christmas in a way we never ever thought we would know it," he said. "We need a little Christmas and we've been given it."

Richard Scinto, a deacon at St. Rose of Lima, said Weiss had used several eulogies to tell his congregation to get angry and take action against what some consider is a culture of gun violence in the country.

While the grief is still fresh, some residents are urging political activism. A group called Newtown United has been meeting at the library to talk about issues ranging from gun control, to increasing mental health services to the types of memorials that could be erected for the victims. Some clergy members have said they also intend to push for change.

Meningitis, West Nile occupy U.S. health officials in 2012

As of December 11, 5,387 cases of West Nile virus had been reported in 48 states, resulting in 243 deaths, the CDC said in its final 2012 update on the outbreak. The 2003 outbreak left 264 dead from among nearly 10,000 reported cases.

Transmitted by infected mice, Hantavirus is a severe, sometimes fatal syndrome that affects the lungs. West Nile can cause encephalitis or meningitis, infection of the brain and spinal cord or their protective covering.

Meningitis, West Nile occupy U.S. health officials in 2012

Health officials said that only a small percentage of cases of West Nile virus are reported because most people have no symptoms and about 20 percent have mild symptoms such as aches and fever. One in 150 people with West Nile virus develop other illnesses such as meningitis and encephalitis.

And what lies ahead in 2013?

(This refile corrects paragraph two to 39 instead of 243)

A large number of cases this year occurred in Texas, Louisiana and Mississippi where there are large mosquito populations.

After a large outbreak of fungal meningitis was linked to tainted steroid injections, Lovelace's cause of death was revised. He became the first documented death in a meningitis outbreak that has infected 620 people and killed 39 in 19 states.

In early September, a 78-year-old judge named Eddie Lovelace was rushed to a hospital in Nashville, Tennessee. Thought to have had a stroke, he died a few days later.

The outbreak led two Democratic lawmakers in the U.S. House of representatives to introduce legislation to increase government oversight of compounded drugs.

(Reporting by Adam Kerlin; Editing by Paul Thomasch)

CDC and state officials have said that rainfall in the spring and record high summer temperatures contributed to the severity of the outbreak by affecting mosquito populations, which transmit the disease by biting humans and animals.

Weather contributed to the worst outbreak of West Nile virus since 2003 and an unusual outbreak of Hantavirus in California's Yosemite National Park.

The biggest outbreak in nearly two decades of Hantavirus, which emerges in dry and dusty environments, cropped up during the summer in 1,200-square-mile (3,100-square-km) Yosemite National Park, killing three of 10 infected visitors.

The New England Compounding Center in Framingham, Massachusetts, was closed after investigators found that it had shipped thousands of fungus-tainted vials of methylprednisolone acetate to medical facilities around the United States. The steroid was typically used to ease back pain.

More than 14,000 people were warned that they may have had an injection of the tainted steroid. Doctors continue to see new cases of spinal infections related to the steroid, and cases of achnoiditis, an inflammation of nerve roots in the spine.

"While there are some trends we can predict, the most reliable trend is that the next threat will be unpredictable," said Centers for Disease Control and Prevention (CDC) Director Thomas Frieden.

NEW YORK (Reuters) - The year started in the United States with a mild flu season but ended up being marked by deadly outbreaks of fungal meningitis, West Nile virus and Hantavirus.

The National Park issued warnings to 22,000 people who may have been exposed to the rare disease, and 91 Curry Village cabins in the park were closed in late August.

Tainted steroid medication has been cited as the cause of the meningitis outbreak that killed 39 people.

Putin says he will sign anti-US adoptions bill

Mansur Mirovalev contributed to this report

Children's rights ombudsman Pavel Astakhov on Thursday petitioned the president to extend the ban to other countries.

The bill is retaliation for an American law that calls for sanctions against Russian officials deemed to be human rights violators.

The U.S. State Department says it regrets the Russian Parliament's decision to pass the bill, saying it would prevent many children from growing up in families.

The U.S. law, called the Magnitsky Act, stems from the case of Sergei Magnitsky, a Russian lawyer who died in jail after being arrested by police officers whom he accused of a $230 million tax fraud. The law prohibits officials allegedly involved in his death from entering the U.S.

MOSCOW (AP) — Russian President Vladimir Putin said Thursday he will sign a controversial bill barring Americans from adopting Russian children, while the Kremlin's children's rights advocate recommended extending the ban to the rest of the world.

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UNICEF estimates that there are about 740,000 children not in parental custody in Russia, while only 18,000 Russians are now waiting to adopt a child. Russian officials say they want to encourage more Russians to adopt Russian orphans.

Kremlin critics say that means Russian officials who own property in the West and send their children to Western schools would lose access to their assets and families.

Kremlin critics say Astakhov is trying to extend the ban only to get more publicity and win more favors with Putin. A graduate of the KGB law school and a celebrity lawyer, Astakhov was a pro-Putin activist before becoming children's rights ombudsman and is now seen as the Kremlin's voice on adoption issues.

The bill is part of the country's increasingly confrontational stance with the West and has angered some Russians who argue it victimizes children to make a political point.

Critics of the bill have left dozens of stuffed toys and candles outside the parliament's lower and upper houses to express solidarity with Russian orphans.

The passage of the bill follows weeks of a hysterical media campaign on Kremlin-controlled television that lambasts American adoptive parents and adoption agencies that allegedly bribe their way into getting Russian children.

Putin said U.S. authorities routinely let Americans suspected of violence toward Russian adoptees go unpunished — a clear reference to Dima Yakovlev, a Russian toddler for whom the adoption bill is named. The child was adopted by Americans and then died in 2008 after his father left him in a car in broiling heat for hours. The father was found not guilty of involuntary manslaughter.

"I still don't see any reasons why I should not sign it," Putin said at a televised meeting. He went on to say that he "intends" to do so.

"There is huge money and questionable people involved in the semi-legal schemes of exporting children," he tweeted.

Astakhov said Wednesday that 46 children who were about to be adopted in the U.S. would remain in Russia if the bill comes into effect.

A few lawmakers claimed that some Russian children were adopted by Americans only to be used for organ transplants and become sex toys or cannon fodder for the U.S. Army. A spokesman with Russia's dominant Orthodox Church said that the children adopted by foreigners and raised outside the church will not "enter God's kingdom."

The law would block dozens of Russian children now in the process of being adopted by American families from leaving the country and cut off a major route out of often-dismal orphanages. The U.S. is the biggest destination for adopted Russian children — more than 60,000 of them have been taken in by Americans over the past two decades.

"This is cynicism beyond limits," opposition leader Ilya Yashin tweeted. "The children rights ombudsman is depriving children of a future."

Putin says he will sign anti-US adoptions bill

Fit for Flight? Space Tourism Lacks Medical Standards

The rise of space tourism is going to bring a new headache to doctors' doors: whether or not to approve their patients for spaceflight. Worse, a new paper cautions, there is no established protocol in place to judge a person fit for making the trip.

Lead author Marlene Grenon said her team's recent paper in the British Medical Journal was designed to make doctors aware of potential health issues related to spaceflight. How to set medical standards, and the implications for insurance, are matters for further research, she said.

Doctors aren't fumbling completely in the dark, though, as they already know many of the effects of weightlessness on the human body. Microgravity hardens arteries, affects eyeballs and weakens bones. Astronauts also can get motion sickness, accumulate large doses of potentially dangerous radiation and experience kidney stones.

Medical tests will matter even more during lengthier space missions, Grenon added. On the first flights, tourists will "only be in microgravity for a few minutes. But as we step more into space and we go into a space hotel, those [conditions] are all things that will need to be better understood."

Standards are even more stringent for NASA astronauts. Laser eye surgery is permitted when an astronaut is selected, but only if it was performed more than a year ago. The ability to cope in small spaces, under high stress, is extensively tested. Nutrition, exercise and mental health are constantly evaluated and recorded in the years of training before an astronaut launches.

Physicians have plenty of data about these super-healthy space travellers. But there's little advice available for more ordinary specimens — people with health issues such as osteoporosis, for example. Only a handful of space tourists, politicians and other non-specialized astronauts have journeyed into orbit.

Follow Elizabeth Howell @howellspace, or SPACE.com @Spacedotcom. We're also on Facebook and Google+.

Setting a standard

Doctors are working to fill the gap. In June, an FAA-sponsored medical group suggested guidelines for flight crew and spaceflight participants.

The guidelines are not binding, and the FAA's center of excellence for commercial space transportation cautioned that it does not necessarily endorse the recommendations. But Grenon said this effort is the best one put forth so far.

The 23-page document suggests pre-flight measures such as medical questionnaires, screening for certain mental health conditions, and chest X-rays and electrocardiograms.

Now Boarding: The Top 10 Private Spaceships Special Report: The Private Space Taxi Race Singer Sarah Brightman Undergoes Space Flight Medical Exam | Video Copyright 2012 SPACE.com, a TechMediaNetwork company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

More data needed

Grenon's co-authors have affiliations with the Canadian Space Agency, Virgin Galactic and several Canadian and U.S. medical schools. One has even been to space — Millie Hughes-Fulford flew on the space shuttle's STS-40 mission in 1991.?

Aerospace is one of the most highly regulated industries in the world. In the United States, pilots and crewmembers must pass strict medical exams authorized by the Federal Aviation Administration (FAA). The military has its own set of exams for Navy aviators and Air Force pilots.

Fit for Flight? Space Tourism Lacks Medical Standards
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The new study stops short of suggesting rigid regulation, saying that too much of it would hurt the space tourism industry before it even gets off the ground. Rather, the researchers encourage doctors to "consider developing a resource file for future reference."

"The question is, should there be standards set or not?" said Grenon, an assistant professor of vascular surgery at the University of California, San Francisco. "If you start [restricting] the number of people who are going to fly to the healthiest people, you're not going to encourage the market to develop." [Photos: The First Space Tourists]

Kidney stones are never pleasant, but they can be particularly problematic on orbit. In 1982, the Soviet Union planned to evacuate an astronaut with a severe case from its Salyut 7 space station but ultimately decided against it.

If a potential space tourist were to pop in Grenon's office today and ask for medical approval, Grenon said her primary tool would be standards set by the company flying the astronaut.

U.S. spaceflight participant Charles…

This leaves medical procedures in the hands of Virgin Galactic and other private companies, meaning that physical exams are not necessarily subject to government regulation.

Mental illness, poverty haunted Afghan policewoman who killed American

RAW SEWAGE, STAGNANT WATER, DIRT ROADS

Her son Sayed, 16, and daughter Fatima, 13, described how they tried to call their parents 100 times after news broke of the shooting, then waited in vain for them to come home.

"People are killed every day."

Asked what he thought of the attack, he laughed.

On Monday morning, she loaded a pistol in a bathroom at the police compound, hid it in her long scarf and shot an American police trainer, apparently becoming the first Afghan woman to carry out such an attack.

"My father was usually calm and sometimes would say that she was guilty too because it wasn't a forced marriage. They fell in love and got married."

Neighbor Mohammad Ismail Kohistani was dumbfounded to hear on the radio that Afghan officials were combing Narges' phone records to try to determine whether al Qaeda or the Taliban could have brainwashed her into carrying out a mission.

"I ask the government to free my mother, otherwise our future will be destroyed," said Fatima.

"This is common in Afghanistan," said Khan, who lived through decades of upheaval, including the 10-year Soviet occupation and a civil war that destroyed half of Kabul and killed some 50,000 civilians.

At times, Narges would try to focus on building her children's confidence, telling them to be guided by the Muslim holy book, the Koran, to tackle life's problems.

Afghanistan is one of the world's poorest nations, with a third of its 30 million residents living under the poverty line.

The lane outside their home stank of raw sewage.

(Editing by Ron Popeski)

Narges also tried to shoot police officials after killing the American. Luckily for them, her pistol jammed. Her husband is also under investigation.

Dirty, stagnant water filled holes in dirt roads nearby, where children in tattered clothes played and butchers stood by cow's hooves in shops choked by dust.

"I became very depressed and sad," said Kohistani, sitting on the floor few feet from a tiny wood-burning stove in Narges's home, alongside family photographs and a police training manual.

Fatima would often seek refuge in Kohistani's house when her mother's behavior became unbearable. "She did not hate us, but usually she was angry and would not talk to us," said Fatima, her eyes moist with tears.

Sayed and Fatima said she never spoke badly of the U.S. presence in Afghanistan or of President Hamid Karzai's government.

"She was usually complaining about poverty. She was complaining to my father about our conditions. She was saying that my father was poor," Sayid said in an interview in their damp, cold two-room cement house.

On the floor beside him were his mother's prescriptions and a thick plastic bag filled with pills she tried to swallow to end the misery about a month ago. On another occasion, she cut her wrist with a razor, Sayed said.

But he was acutely aware of her mental problems and often heard her scream at her husband, whose low-level job in the crime investigation unit of the police brought home little cash.

The shooting at the police headquarters may have alarmed Afghanistan's Western allies. But some Afghans have grown numb to the violence.

There was no sign in their neighborhood of the billions of dollars of Western aid that have poured into Afghanistan since the ouster of the Taliban in 2001, or of government investment.

Kohistani, who operates a small sewing shop with battered machines, never imagined his neighbor could be accused of a high-profile attack that raised new questions about the direction of an unpopular war.

Nevertheless, she missed her mother. The children were staying with a cousin.

Mental illness, poverty haunted Afghan policewoman who killed American

They recalled Narges's severe mood swings, and how at times she beat them and even pulled out a knife. But the children said she was consistent in bemoaning poverty.

The woman was identified by authorities as Narges Rezaeimomenabad, a 40-year-old grandmother and mother of three who moved here from Iran 10 years ago and married an Afghan man.

Kohistani's 70-year-old father Omara Khan, who sports a white beard, sat twirling prayer beads beneath a photograph of Narges in a black veil beside one of her husband.

KABUL (Reuters) - The Afghan policewoman suspected of killing a U.S. contractor at police headquarters in Kabul suffered from mental illness and was driven to suicidal despair by poverty, her children told Reuters on Wednesday.

The sole distractions from the daily grind appeared to be a deck of playing cards and a compact disc with songs from Iranian pop singers, scattered on the floor of a room where Narges would lock herself in and weep, or sit in silence.

Officials described it as another "insider shooting", in which Afghan forces turn on Westerners they are meant to be working with to stabilize the country. There have been over 52 such attacks so far this year.

Over the fiscal cliff- How hard a landing-

NEW YEAR'S HEADACHE

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Obama, meanwhile, wants more temporary economic "stimulus" spending to help speed up a sluggish recovery. Republicans say the nation can't afford it.

— Some $536 billion in tax increases, touching nearly all Americans, because various federal tax cuts and breaks expire at year's end.

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Follow Connie Cass on Twitter: http://www.twitter.com/ConnieCass

— Lawmakers aren't expected to return to the Capitol until after Christmas, leaving less than a week to vote on a compromise before year's end.

To avoid that scenario, Obama and Boehner are trying to wrap a debt limit agreement into the fiscal cliff negotiations.

— Millions of taxpayers who want to file their 2012 returns before mid-March will be held up while they wait to see if Congress comes through with a deal to stop the alternative minimum tax from hitting more people.

In theory, Congress and Obama could just say no to the fiscal cliff, by extending all the tax cuts and overturning the automatic spending reductions in current law. But both Republicans and Democrats agree it's time to take steps to put the nation on a path away from a future of crippling debt.

If negotiations between Obama and Congress collapse completely, 2013 looks like a rocky year.

But there's a reason neither side wants to give ground. The two parties represent a divided and inconsistent America. True, Obama just won re-election. But voters also chose a Republican majority in the House.

The temporary Social Security payroll tax cut also is due to expire. That tax break for most Americans seems likely to end even if a fiscal cliff deal is reached, now that Obama has backed down from his call to prolong it as an economic stimulus.

When asked about specific budget cuts being discussed in Washington, few Americans express support for them.

"The consequences of that would be felt by everybody," Bernanke says.

If New Year's Day arrives without a deal, the nation shouldn't plunge onto the shoals of recession immediately. There still might be time to engineer a soft landing.

— The price of milk could double. If Congress doesn't provide a fix for expiring dairy price supports before Jan. 1, milk-drinking families could feel the pinch. One scenario is to attach a farm bill extension to the fiscal cliff legislation — if a compromise is reached in time.

Time for deal-making is short, thanks to the holiday and congressional calendars. Some key dates for averting the fiscal cliff:

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THE TAXES

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President Barack Obama waves as…

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Republican and Democrats alike say they are doing what the voters back home want.

If the nation goes over the fiscal cliff, budget cuts of 8 percent or 9 percent would hit most of the federal government, touching all sorts of things from agriculture to law enforcement and the military to weather forecasting. A few areas, such as Social Security benefits, Veterans Affairs and some programs for the poor, are exempt.

CALL THE WHOLE THING OFF?

Over the fiscal cliff: How hard a landing? Related Content

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— Social Security recipients might see their checks grow more slowly. As part of a possible deal, Obama and Republican leaders want to change the way cost-of-living adjustments are calculated, which would mean smaller checks over the years for retirees who get Social Security, veterans' benefits or government pensions.

Republicans also insist on deeper spending cuts than Democrats want to make. And they want to bring the nation's long-term debt under control by significantly curtailing the growth of Medicare, Medicaid and Social Security — changes that many Democrats oppose.

All sorts of stuff could get wrapped up in the fiscal cliff deal-making. A sampling:

Partly by fate, partly by design, some scary fiscal forces come together at the start of 2013 unless Congress and Obama act to stop them. They include:

— Some 2 million jobless Americans may lose their federal unemployment aid. Obama wants to continue the benefits extension as part of the deal; Republicans say it's too costly.

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SO WHAT'S THE HOLDUP?

So long as lawmakers and the president appear to be working toward agreement, the tax hikes and spending cuts could mostly be held at bay for a few weeks. Then they could be repealed retroactively once a deal was reached.

— The current Congress is in session only through noon Eastern time on Jan. 3. After that, a newly elected Congress with 13 new senators and 82 new House members would inherit the problem.

THE COUNTDOWN

Obama says any deal must include higher taxes for the wealthiest Americans. Many House Republicans oppose raising anyone's tax rates. Boehner tried to get the House to vote for higher taxes only on incomes above $1 million but dropped the effort when it became clear he didn't have the votes.

If Washington bypassed the fiscal cliff, the next crisis would be just around the corner, in late February or early March, when the government reaches a $16.4 trillion ceiling on the amount of money it can borrow.

— If lawmakers reach Dec. 31 without a deal, some economists worry that the financial markets might swoon.

Federal Reserve Chairman Ben Bernanke has warned lawmakers that the economy is already suffering from the uncertainty and they shouldn't risk making it worse by blowing past their deadline.

Seems like they could just make nice, shake hands and split their differences, right?

A look at why it's so hard for Republicans and Democrats to compromise on urgent matters of taxes and spending, and what happens if they fail to meet their deadline:

Associated Press writers Jim Kuhnhenn, Alan Fram and Andrew Taylor and Director of Polling Jennifer Agiesta contributed to this report.

About half of Americans support higher taxes for the wealthy, the poll says, and about 10 percent want tax increases all around. Still, almost half say cutting government services, not raising taxes, should be the main focus of lawmakers as they try to balance the budget.

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THERE'S MORE AT STAKE

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Hitting the national economy with that double whammy of tax increases and spending cuts is what's called going over the "fiscal cliff." If allowed to unfold over 2013, it would lead to recession, a big jump in unemployment and financial market turmoil, economists predict.

Taxes would jump $2,400 on average for families with incomes of $50,000 to $75,000, according to a study by the non-partisan Tax Policy Center. Because consumers would get less of their paychecks to spend, businesses and jobs would suffer.

IT'S NOT JUST WASHINGTON

At the same time, Americans would feel cuts in government services; some federal workers would be furloughed or laid off, and companies would lose government business. The nation would lose up to 3.4 million jobs, the Congressional Budget Office predicts.

The big wild card is the stock market and the nation's financial confidence: Would traders start to panic if Washington appeared unable to reach accord? Would worried consumers and businesses sharply reduce their spending? In what could be a preview, stock prices around the world dropped Friday after House Republican leaders' plan for addressing the fiscal cliff collapsed.

Several tax breaks begun in 2009 to stimulate the economy by aiding low- and middle-income families are also set to expire Jan. 1. The alternative minimum tax would expand to catch 28 million more taxpayers, with an average increase of $3,700 a year. Taxes on investments would rise, too. More deaths would be covered by the federal estate tax, and the rate climbs from 35 percent to 55 percent. Some corporate tax breaks would end.

Boehner says Republicans won't go along with raising the limit on government borrowing unless the increase is matched by spending cuts to help attack the long-term debt problem. Failing to raise the debt ceiling could lead to a first-ever U.S. default that would roil the financial markets and shake worldwide confidence in the United States.

WHAT IF THEY MISS THE DEADLINE?

THE SPENDING

Much of the disagreement surrounds the George W. Bush-era income tax cuts, and whether those rates should be allowed to rise for the nation's wealthiest taxpayers. Both political parties say they want to protect the middle-class from tax increases.

President Barack Obama, on his way out of town himself, insisted a bargain could still be struck before Dec. 31. "Call me a hopeless optimist," he said.

WASHINGTON (AP) — Efforts to save the nation from going over a year-end "fiscal cliff" were in disarray as lawmakers fled the Capitol for their Christmas break. "God only knows" how a deal can be reached now, House Speaker John Boehner declared.

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WHAT IF THEY NEVER AGREE?

— About $110 billion in spending cuts divided equally between the military and most other federal departments. That's about 8 percent of their annual budgets, 9 percent for the Pentagon.

They're at loggerheads over some big questions.

— Obama and his family also left town for a Christmas vacation in Hawaii. The president said because the fiscal cliff was still unresolved, he would return to Washington this week.

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Indeed, the automatic spending cuts set for January were created as a last-ditch effort to force Congress to deal with the debt problem.

Neither side has a clear advantage in public opinion. In an Associated Press-GfK poll, 43 percent said they trust the Democrats more to manage the federal budget deficit and 40 percent preferred the Republicans. There's a similar split on who's more trusted with taxes.

Ambushed NY firemen shot dead; two police killed elsewhere

Ambushed NY firemen shot dead; two police killed elsewhere
(Reuters) - A gunman, who spent 17 years in prison for murder, ambushed and killed two volunteer firefighters and wounded two others on Monday near Rochester, New York, as they responded to a house fire he deliberately set, police said.

William Spengler, 62, shot and killed himself after a gunfight with a police officer in Webster, a Rochester suburb, Webster Police Chief Gerald Pickering said.

"It was a trap set by Mr. Spengler, who laid in wait and shot first responders," Pickering told a news conference.

Separately, a police officer in Wisconsin and another in Texas were shot and killed on Monday, according to police and media reports.

The attacks on first responders came 10 days after one of the worst mass shootings in U.S. history that left 20 students and six adults dead at an elementary school in Newtown, Connecticut, and intensified the debate about gun control in the United States.

Spengler was convicted of manslaughter in 1981 for beating his 92-year-old grandmother to death with a hammer, according to New York State Department of Corrections records. After prison he spent eight years on parole.

"We don't have an easy reason" for the attack on the firefighters, Pickering said, "but just looking at the history ... obviously this was an individual with a lot of problems."

Spengler opened fire around 5:45 a.m. after two of the firefighters arrived at the house in a fire truck and two others responded in their own cars, Pickering said.

Pickering appeared to wipe tears from his eyes at an earlier news conference when he identified the dead firefighters as Lieutenant Michael Chiapperini and Tomasz Kaczowka. Chiapperini was also a police lieutenant.

The injured firefighters, one of whom was in critical condition, were identified as Joseph Hofsetter and Theodore Scardino. Off-duty Police Officer John Ritter was hit by gunfire as he drove past the scene.

Pickering said police had found several types of weapons, including a rifle used to shoot the firefighters. As a convicted felon it was illegal for Spengler to own guns.

Police had not had any contact with Spengler in the "recent past," Pickering said.

Four houses were destroyed by the fire and four were damaged, Pickering said.

COPS TARGETED

Police Officer Jennifer Sebena, 30, was found dead on Monday in the Milwaukee, Wisconsin, suburb of Wauwatosa, police said.

Sebena was on patrol between 3 a.m. and 5 a.m. and wearing body armor when she was shot several times, police said. She was found by another officer after she did not respond to calls from the police dispatcher.

In Houston, Texas, an officer with the Bellaire Police Department died after a shootout at around 9 a.m. and a bystander was also killed, according to local media reports.

A spokesperson for the Houston Police Department was not immediately available for comment. A police officer answering the telephone confirmed media reports but declined further comment. A suspect was in the hospital, according to reports.

Before Monday's killings, the Washington-based National Law Enforcement Officers Memorial Fund reported that 125 federal, state and local officers had died in the line of duty this year.

Forty-seven deaths were firearms-related, 50 were from traffic-related incidents, and 28 were from other causes, it said.

Fear, finger-pointing mount over US fiscal cliff

Fear, finger-pointing mount over US fiscal cliff
WASHINGTON (REUTERS) - Top United States (US) lawmakers voiced rising fear on Sunday that the country would go over "the fiscal cliff" in nine days, triggering harsh spending cuts and tax hikes, and some Republicans charged that was President Barack Obama's goal.

"It's the first time that I feel it's more likely that we will go over the cliff than not," Senator Joe Lieberman, an independent from Connecticut, said on CNN's State Of The Union.

"If we allow that to happen it will be the most colossal consequential act of congressional irresponsibility in a long time, maybe ever in American history," Mr Lieberman added.

The Democratic president and Republican House of Representatives Speaker John Boehner, the two key negotiators, are not talking and are out of town for the Christmas holidays.

N.Y.S.E. Is in Talks for Merger

9:02 p.m. | Updated
An $8 billion exchange merger is in the works that underscores how the global market for derivatives has eclipsed that for stocks.
The owner of the venerable New York Stock Exchange is in talks to be acquired by an upstart commodities and derivatives trading platform, according to people briefed on the matter. The IntercontinentalExchange is expected to offer about $33 a share, with two-thirds of that in stock, one of these people said. That represents a premium of 37 percent to NYSE Euronext’s closing stock price on Wednesday.
A deal could be announced as soon as Thursday morning, though these people cautioned that talks may still break down.
While the New York Stock Exchange, with its opening bell and floor traders, has been the public image of a stock market for two centuries, it is NYSE Euronext’s businesses in the over-the-counter trading of derivatives — including the Liffe market in London — that appear to be the main attraction in the merger talks.
IntercontinentalExchange, or ICE, was founded in 2000 and is based in Atlanta. It competes fiercely with the CME Group, a derivatives trading powerhouse that owns the Chicago Mercantile Exchange and the Chicago Board of Trade.

More than a year ago, ICE teamed up with the New York exchange’s chief rival, the Nasdaq OMX Group, to make a hostile bid for NYSE Euronext. The two had sought to break up their older competitor’s plan to merge with Deutsche Börse of Europe, which would have created a powerful trans-Atlantic company with a big market share in the trading of stocks and derivatives.
Under the terms of that deal, valued at about $11 billion, Nasdaq would have taken NYSE Euronext’s equities business, while ICE would have assumed the derivatives operations.
But the Justice Department threatened to block that joint offer, on the ground that combining NYSE Euronext and Nasdaq would create an overwhelming monopoly in the world of stock trading.
The planned merger of NYSE Euronext and Deutsche Börse itself fell apart early this year after European antitrust regulators opposed the combination, on the ground that it would corner too much of the market in exchange-traded derivatives.
But the newest merger might pose fewer problems because ICE focuses on commodities like oil, natural gas and cotton, while NYSE Euronext plies mainly in stock and stock options and derivatives.
And unlike several proposed mergers, like that of the Singaporean and Australian stock exchanges, which fell apart last year on nationalist concerns, this potential deal would take place between two companies from the same country.
After its deal with Deutsche Börse collapsed, NYSE Euronext was left to conduct some soul-searching. At the time, the company said that it would most likely look to smaller acquisitions and cost-cutting.
The trading of stocks has become a less attractive business. The New York Stock Exchange is now responsible for only about 11 percent of all stock trading, while NYSE Euronext’s electronic Arca platform accounts for another 12 percent, according to industry data.
The average number of American stocks traded each day has fallen every year since 2009, and has continued to decline over the course of 2012, according to statistics from Credit Suisse. The volume of trading in futures and options, where ICE is focused, has also fallen since last year, but less than in stocks.
A tie-up with ICE, however, would link NYSE Euronext to one of the industry’s fastest-growing exchanges. ICE has some of the highest profit margins in the business.
It might also reap some of the benefits that have driven a decade-long spree of consolidation among exchanges. Such companies have long sought to gain the greater scale and cost savings that come from combining back-end operations and staff cuts.
Still, the potential merger would sharply expand ICE, which despite its bigger market value is a smaller company. It has a little more than 1,000 employees, while NYSE Euronext has 3,077.
It isn’t clear whether other exchanges would seek to break up the proposed transaction. The CME Group is a candidate to express opposition. But the firm appeared to have little appetite in bidding for NYSE Euronext last year, and it may run into antitrust concerns.
Other potential spoilers, including the Hong Kong and Singaporean exchanges, could run into nationalist concerns.
Shares of NYSE Euronext rose more than 21 percent in after-hours trading, to $29.20, after The Wall Street Journal reported news of the talks.
Nathaniel Popper contributed reporting.