Analysis: Democrats' discord undercuts Obama estate tax push

WASHINGTON (Reuters) - Divisions among Democrats are undermining President Barack Obama's push to raise the U.S. estate tax on inherited wealth, just weeks before the arrival of the "fiscal cliff" could drive the present estate tax rate even higher than Obama proposes.
Action on the estate tax could be postponed. But in his successful re-election campaign, Obama called for wealthy Americans to pay more in taxes - and it is overwhelmingly the wealthy who pay the estate tax.
The outcome may hinge on whether Obama insists on his estate tax proposal - or something close to it - as forcefully as he has insisted on raising individual income tax rates for high income-earners, or whether he lets the issue be put off.
If a single facet of the complicated partisan stand-off over taxing the wealthy best captures Capitol Hill's fiscal gridlock, it may be the estate tax - a long-standing and volatile issue - that may finally be coming to a head.
"If you look at where the public is on tax issues compared to the last time this was debated - it is night and day," said Frank Clemente, campaign manager for left-leaning Americans for Tax Fairness. "They are deep into this tax fairness position."
The "fiscal cliff" is a collection of federal tax increases and automatic government spending cuts that, if allowed to take effect as scheduled early in 2013, could push the U.S. economy into recession, according to economists' forecasts.
Part of the picture is the estate tax.
Under laws signed a decade ago by former Republican President George W. Bush, the estate tax is applied to inherited assets at 35 percent after a $5 million exemption. That means a deceased person can pass on an inheritance of up to $5 million before any tax applies.
Inherited wealth passed to a spouse or a federally recognized charity is generally not taxed.
Obama wants to raise the rate to 45 percent after a $3.5 million exemption. If the Bush rates are allowed to expire and Congress does nothing, the rate will shoot up next year to the pre-Bush levels of 55 percent after a $1 million exemption.
SCHUMER ON ESTATE TAX
New York Senator Charles Schumer on Thursday said the Democrats' proposal to avert the "fiscal cliff" involves $1 trillion in immediate deficit reduction that includes new revenue from raising the estate tax to the level proposed by Obama.
No less a power broker than Democratic Senate Finance Committee Chairman Max Baucus said this week, however, that he wants to hold the estate tax steady at current rates.
Baucus is up for re-election in 2014 from Montana. He says ranch and farm owners in his state would stand to lose if federal taxes rose on passing property to heirs.
"Rural Montana is much different than urban America," Baucus told Reuters in a brief interview in the U.S. Capitol.
He told a Montana newspaper on Sunday that he would even support scrapping the estate tax altogether, as most Republicans favor. A spokesman for Baucus - the Senate's top tax law writer - said he will seek as much estate tax "relief" as he can get.
At least three other rural-state Democratic senators have proposed extending current estate tax rates: Claire McCaskill of Missouri, Jon Tester of Montana and Mark Pryor of Arkansas.
Spokesmen for Pryor and McCaskill said everything is on the table as Congress struggles to deal with the "fiscal cliff."
But one thing is clear: the voice of farming lobbyists is registering with Democrats on the volatile estate tax issue, although it is only marginally about farms and ranches.
BEYOND FARMS AND RANCHES
The estate tax's impact extends beyond farmers and ranchers. It applies mostly to very wealthy Americans, whose taxes have been specifically targeted for increase by a president whom voters returned to the White House just three weeks ago following a tough campaign in which taxes were a key topic.
Of the 3,600 estates subject to the estate tax this year, only 100 are classified as farming estates, according to the congressional Joint Committee on Taxation.
The wealthiest 10 percent of Americans pay nearly all of the estate tax under current rates, according to the Tax Policy Center, a non-partisan fiscal policy think tank.
The number of estates subject to the tax would double under the plan proposed by Obama. About 300 farming estates would be subject to the tax under Obama's terms, which would raise about $100 billion in new revenue for the government over 10 years.
Republicans have benefited previously from Democratic division over the tax. In July, Senate Democrats shelved a plan to raise the estate tax with a symbolic extension of the Bush tax rates for the middle-class.
A senior Senate Democratic aide said the tax was pulled from the bill because Obama felt strongly about boosting the tax. It is unclear how hard he will fight for his position this time.
BY ANY OTHER NAME
The divide between the political parties over the tax is so wide that they cannot even agree on a name for it. Democrats call it the estate tax, as it is described in law.
Republicans, who generally want to repeal it, have another, more provocative name. They call it the "death tax" and characterize it as a penalty on being wealthy and successful.
First enacted nearly a century ago to combat the rise of dynastic wealth and check income disparity, the estate tax is the most progressive tax there is. That means it hits the wealthy much more than lower income groups.
It was a Republican president, Teddy Roosevelt, that proposed the first permanent inheritance tax, arguing that inheritance of "enormous fortunes" does a society no good.
"No advantage comes either to the country as a whole or to the individuals inheriting the money by permitting the transmission in their entirety of the enormous fortunes which would be affected by such a tax," Roosevelt said.
Another decade passed before it was adopted in 1916, partly to fund World War I. The rate has waxed and waned, hitting a high of 77 percent prior to World War II.

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Canadian year-to-date budget deficit narrows in September

OTTAWA (Reuters) - Canada's federal budget deficit dropped in the first six months of the fiscal year, falling to C$8.9 billion ($9.0 billion) in April to September from a C$11.8 billion shortfall in the same period of last year, the Department of Finance said on Friday.
The monthly deficit in September fell slightly to C$2.69 billion from C$2.75 billion in September 2011.
Revenues in the first six months of the fiscal year were up by 2.8 percent, compared with the same period in 2011, reflecting higher income tax revenues, excise taxes and duties, the finance department said.
Program expenses rose by 1.4 percent, mainly due to higher transfer payments.
September revenues fell by 0.1 percent from September 2011 while program expenses increased by 0.6 percent. Public debt charges fell by 7.6 percent.

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Number of ND 'income millionaires' jumps by 102

BISMARCK, N.D. (AP) — A record number of North Dakotans reported seven-figure incomes last year, many of whom are benefiting from the state's oil bonanza, the state Tax Department says.
Figures released to The Associated Press show a record 634 people reported incomes of more than $1 million on their 2011 individual tax returns, up from 532 in 2010 and 384 in 2009. In 2006, while North Dakota's oil boom was in its infancy, there were 339 so-called "income millionaires."
About 90 percent of the drilling in western North Dakota occurs on private land.
Tax Department analyst Kathy Strombeck said the increase in the number of North Dakotans with million-dollar incomes comes largely from royalties paid to mineral owners by oil companies.
"Oil has a lot to do with it," she said. "I imagine we'll see growth for a while as we ratchet up projection."
Through September, North Dakota already has set an oil production record for the fifth consecutive year and the state is on pace to best the previous mark by more than 50 million barrels. The state Department of Mineral Resources said crude production through September totaled more than 173.9 million barrels, up from the record 152.9 million barrels set last year.
Tax Department records show the average adjusted gross income in the state increased from $53,036 in 2010 to $60,947 last year. The average adjusted gross income on 2006 returns was about $43,300.
The number of returns has jumped from 339,000 in 2006 to 403,625 last year. The total reported income has increased from $14.6 billion to $21.9 billion during those years, data show.
Tax Commissioner Cory Fong said the higher incomes and the increase in the number of people filing tax returns in the state "adds to the narrative of what we've got going on here in North Dakota."
The oil industry has helped grow wages throughout the state and created hundreds of high-paying jobs. It also has an effect on other industries, including wholesale trade and manufacturing, he said.
"In a way, it's lifting all boats," Fong said.
A strong overall economy and healthy agriculture sector also are factors, Fong said.

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Obama says Republican "fiscal cliff" plan out of balance

Obama says Republican "fiscal cliff" plan out of balance
WASHINGTON (Reuters) - President Barack Obama rejected a Republican proposal to resolve a looming fiscal crisis on Tuesday as "still out of balance" and insisted any deal must include a rise in income tax rates on the wealthiest Americans.
Obama told Bloomberg Television that the Republicans' reliance on eliminating tax deductions instead of letting taxes rise on Americans making more than $250,000 a year would not raise enough money to fund the government.
House of Representatives Speaker John Boehner of Ohio, the top Republican in Congress, laid out a proposal on Monday that called for spending cuts but did not give any ground on Obama's call for an increase in tax rates for the top 2 percent of U.S. earners.
"Unfortunately, the Speaker's proposal right now is still out of balance. You know, he talks, for example, about $800 billion worth of revenues, but he says he's going to do that by lowering rates. And when you look at the math, it doesn't work," Obama said.
Obama, who won re-election last month, said it was important for Republicans to acknowledge that tax rates had to rise for top earners to raise revenue sufficient to balance spending cuts.
"We're going to have to see the rates on the top 2 percent go up. And we're not going to be able to get a deal without it," he said.
Obama said on Tuesday that while tax rates must go up for a "fiscal cliff" deal, it may be possible to lower rates at the top end of the scale late next year as part of tax reforms that would close loopholes and limit deductions.
"Let's let those go up," Obama told Bloomberg in an interview, referring to tax rates for the wealthiest Americans.
"And then let's set up a process with a time certain, at the end of 2013 or the fall of 2013, where we work on tax reform, we look at what loopholes and deductions both Democrats and Republicans are willing to close, and it's possible that we may be able to lower rates by broadening the base at that point."
Obama acknowledged there were more spending cuts that could be made and he pledged to work with Boehner to trim what he called excessive healthcare costs in the budget but that a deal was not possible without raising tax rates on the wealthy.
"There's probably more cuts that we can squeeze out, although we've already made over $1 trillion worth of spending cuts," he said.
Obama said there was not enough time this year to come up with an overhaul of the U.S. tax system and entitlement programs that Republicans want as a condition for an agreement to avoid the so-called fiscal cliff, a combination of tax hikes and spending cuts set to start in 2013 that economists predict will throw the economy into depression.
He said that despite weaknesses in Europe and Asia, he believed the U.S. economy is "poised to take off."
Obama added he is considering bringing a top business executive onto his economic team, but that the Senate confirmation process can be so difficult that some business executives shy away from government service.

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Republicans see some leverage in "fiscal cliff" talks

WASHINGTON (Reuters) - U.S. Republicans may have some leverage in their fiscal cliffhanger with President Barack Obama: the threat of forcing a disproportionate number of Democrats to pay the so-called alternative minimum tax.
Under U.S. law, taxpayers each year must pay the greater of regular federal income tax, or the AMT. The latter requires taxpayers to give up certain tax breaks, typically exemptions and deductions for state and local taxes and medical costs.
Only about 4 million taxpayers pay the AMT because Congress routinely passes a law to adjust for inflation, to spare middle-income and upper-middle income taxpayers. Without this legislative fix, called a "patch" by lawmakers, up to 33 million taxpayers will have to pay an AMT liability for 2012, according to the Internal Revenue Service.
That is one in five taxpayers.
The number of taxpayers affected by the AMT would jump because the AMT exemption amounts and income brackets do not automatically rise with inflation and also because across-the-board individual tax cuts a decade ago did not cut AMT rates.
States with the wealthiest taxpayers and the steepest state taxes, which typically cannot be deducted under the AMT, include New York, California and Illinois - Democratic strongholds.
That may make the threat of a lapse one of the Republicans' strongest cards after Obama's re-election last month on a theme of tax fairness.
"The AMT is one of the more significant pieces of leverage that the Republicans have," said Evan Liddiard, a former tax adviser to Orrin Hatch, the top Republican on the Senate Finance Committee. "It will pinch harder in the blue states."
That may make Republicans less likely to agree to a bill that addresses only the AMT.
Obama's Democrats and Republicans, led by House of Representatives Speaker John Boehner, have been battling while trying to keep from falling over a $600 billion "fiscal cliff" - a combination of tax increases and spending cuts due to be implemented early next year.
Now at a standstill, talks on how to avert the fiscal cliff have been largely focused on whether to renew low tax rates for the wealthiest taxpayers along with everyone else.
In a brief interview in the Capitol, Hatch said voters in the Democratic-leaning states will not be amused if their taxes go up unexpectedly.
"When they find out they are going to get hammered because of the AMT and the lack of plan by this administration to resolve that problem, yes, I think that will cost them (the Democrats) a few votes," Hatch said.
Because the latest AMT patch expired in 2011, it is in some ways more urgent to address the AMT than the Bush-era tax cuts expiring at the end of December.
Congress last patched the AMT in the lame-duck session in 2010. A bipartisan bill passed by the Senate finance committee to patch AMT for 2012 and 2013 was estimated to cost $132.2 billion.
The cost is one reason the AMT never gets patched permanently. Republicans generally want to scrap the AMT altogether; Obama's latest budget calls for adjusting it for inflation.
IRS WARNINGS
Further complicating the AMT picture is the chaos predicted for the tax-filing season due to begin on January 22, the first working day after Obama's inauguration ceremony in Washington.
A letter from the tax-collecting IRS Commissioner Steve Miller on potential agency problems related to the fiscal cliff focuses almost exclusively on the AMT.
Failure to "patch" the AMT could lead to 60 million taxpayers not being able to file tax returns or get a refund, in addition to a software nightmare for the IRS computer systems.
Miller wrote lawmakers on November 13 warning them of serious repercussions for taxpayers, including 28 million with a "very large unexpected tax liability," and delays in refunds for millions.
"Consistent with past practice, I have instructed IRS staff again this year to leave our core systems "as-is" with respect to the AMT, and hold off on the substantial design and engineering work" required otherwise, he wrote.
Miller last briefed the Senate Finance Committee about the need for action late last month, according to a Senate source.
Representative Richard Neal, a senior Democrat on the Ways and Means Committee who represents parts of Massachusetts, said fixing the AMT was an absolute must.
"It has to be done. It reaches too many people if it's not," Neal said. "I think it is again being used as (a) bargaining (chip)."
Republicans say they are holding out for a bigger deal.
"That is not going to solve the fiscal cliff," said Republican Representative Pat Tiberi, who leads the revenue sub-panel of the tax-writing House Ways and Means Committee.

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YEARENDER-Basketball-Lebron shines brightest on every stage

Dec 21 (Reuters) - LeBron James finally captured an elusive National Basketball Association title to cap a year where he silenced his critics and shared the spotlight with some unlikely players.
"Linsanity" became one of the new buzzwords in the NBA while a collegiate player took a sledgehammer to the record books and the Los Angeles Lakers made a blockbuster trade that rekindled memories of the team's "Showtime" era.
James, long considered the NBA's heir apparent to Hall of Famer Michael Jordan, finally delivered a performance worthy of that status with a championship in his ninth season, followed by a gold medal with the United States at the London Olympics.
A dominant force on the court, James had already earned the NBA's scoring title, Most Valuable Player honors and All-Star nods, but it took an elusive title, MVP honors for the regular season and NBA Finals to prove his detractors wrong.
The self proclaimed 'King James' became a player many NBA fans love to hate after going on national television in 2010 to announce his much-publicized move to Miami, but there is no denying his status as one of the game's greatest players.
"It was the hardest thing I've ever done as a basketball player," James said after winning the NBA title in June, beating Oklahoma City in the finals. "You just put a lot of hard work into it and you hope that one day it will pay off for you."
'LINSANITY' CRAZE
Basketball's marquee names were forced to share the limelight with undrafted Taiwanese-American Jeremy Lin, who went from an unknown to an overnight sensation after being thrust into the New York Knicks' starting lineup in February.
Lin burst onto the public consciousness after a masterful series of dynamic displays, scoring at least 20 points in nine of 10 games during a season-high seven-game win streak for the Knicks that sparked the "Linsanity" craze around the globe.
Crowds at New York's Madison Square Garden held an array of pun signs declaring "To Lin-finity and Beyond," "The Sky's the LINit" and "LINCREDIBLE," while a mid-February game in Toronto had one spectator holding a "By my VaLINtine" sign.
Lin's incredible run was undone by a late-season injury but that did not stop Time Magazine from naming him as one of the world's 100 most influential people. He was the only basketball player on a list that included President Barack Obama and billionaire investor Warren Buffet.
At the London Games, a star-studded American team led by James were one of the hottest favorites but were tested by an inspired Spain team before prevailing 107-100 in the gold-medal game to retain their Olympic title.
The victory capped a remarkable run for James, who was named Sports Illustrated's Sportsman of the Year, an award whose previous winners include boxer Muhammad Ali, golfer Jack Nicklaus and swimmer Michael Phelps.
GOLD MEDAL
It also put the finishing touches on an American sweep of basketball gold as the U.S. women collected their fifth consecutive Olympic gold, solidifying the country's dominance in a sport that has become much more competitive since active NBA players first participated in the Olympics in 1992.
The Lakers were the biggest story during the NBA's offseason after landing Dwight Howard in a 12-player trade that rekindled memories of the team's "Showtime" era from 1979-1989 with Hall of Famers Magic Johnson and Kareem Abdul-Jabbar.
Howard, a three-time defensive player of the year, joined a Lakers team that was already bursting with talent in the form of Kobe Bryant and Spain's Pau Gasol and still revelling in the acquisition of two-time league MVP Steve Nash a month earlier.
The massive trade immediately bolstered the Lakers championship credentials, a welcome development for a franchise that has suffered two straight early playoff exits since winning a 16th NBA title in 2010.
But despite the formidable Lakers lineup, the team stumbled out of the gate and their head coach was fired after a 1-4 start to the 2012-13 NBA as players were unable to grasp his new offensive system.
Some of the year's top stories even came from outside the professional ranks as Jack Taylor, a sophomore guard at Iowa's Grinnell College, shattered the National Collegiate Athletic Association (NCAA) scoring record with a 138-point performance in a Division III game.
The 22-year-old guard from Iowa's Grinnell College, drew national attention for his performance, which shattered the previous record of 113 points set in 1954.

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Lebron shines brightest on every stage

(Reuters) - LeBron James finally captured an elusive National Basketball Association title to cap a year where he silenced his critics and shared the spotlight with some unlikely players.
"Linsanity" became one of the new buzzwords in the NBA while a collegiate player took a sledgehammer to the record books and the Los Angeles Lakers made a blockbuster trade that rekindled memories of the team's "Showtime" era.
James, long considered the NBA's heir apparent to Hall of Famer Michael Jordan, finally delivered a performance worthy of that status with a championship in his ninth season, followed by a gold medal with the United States at the London Olympics.
A dominant force on the court, James had already earned the NBA's scoring title, Most Valuable Player honors and All-Star nods, but it took an elusive title, MVP honors for the regular season and NBA Finals to prove his detractors wrong.
The self proclaimed 'King James' became a player many NBA fans love to hate after going on national television in 2010 to announce his much-publicized move to Miami, but there is no denying his status as one of the game's greatest players.
"It was the hardest thing I've ever done as a basketball player," James said after winning the NBA title in June, beating Oklahoma City in the finals. "You just put a lot of hard work into it and you hope that one day it will pay off for you."
'LINSANITY' CRAZE
Basketball's marquee names were forced to share the limelight with undrafted Taiwanese-American Jeremy Lin, who went from an unknown to an overnight sensation after being thrust into the New York Knicks' starting lineup in February.
Lin burst onto the public consciousness after a masterful series of dynamic displays, scoring at least 20 points in nine of 10 games during a season-high seven-game win streak for the Knicks that sparked the "Linsanity" craze around the globe.
Crowds at New York's Madison Square Garden held an array of pun signs declaring "To Lin-finity and Beyond," "The Sky's the LINit" and "LINCREDIBLE," while a mid-February game in Toronto had one spectator holding a "By my VaLINtine" sign.
Lin's incredible run was undone by a late-season injury but that did not stop Time Magazine from naming him as one of the world's 100 most influential people. He was the only basketball player on a list that included President Barack Obama and billionaire investor Warren Buffet.
At the London Games, a star-studded American team led by James were one of the hottest favorites but were tested by an inspired Spain team before prevailing 107-100 in the gold-medal game to retain their Olympic title.
The victory capped a remarkable run for James, who was named Sports Illustrated's Sportsman of the Year, an award whose previous winners include boxer Muhammad Ali, golfer Jack Nicklaus and swimmer Michael Phelps.
GOLD MEDAL
It also put the finishing touches on an American sweep of basketball gold as the U.S. women collected their fifth consecutive Olympic gold, solidifying the country's dominance in a sport that has become much more competitive since active NBA players first participated in the Olympics in 1992.
The Lakers were the biggest story during the NBA's offseason after landing Dwight Howard in a 12-player trade that rekindled memories of the team's "Showtime" era from 1979-1989 with Hall of Famers Magic Johnson and Kareem Abdul-Jabbar.
Howard, a three-time defensive player of the year, joined a Lakers team that was already bursting with talent in the form of Kobe Bryant and Spain's Pau Gasol and still revelling in the acquisition of two-time league MVP Steve Nash a month earlier.
The massive trade immediately bolstered the Lakers championship credentials, a welcome development for a franchise that has suffered two straight early playoff exits since winning a 16th NBA title in 2010.
But despite the formidable Lakers lineup, the team stumbled out of the gate and their head coach was fired after a 1-4 start to the 2012-13 NBA as players were unable to grasp his new offensive system.
Some of the year's top stories even came from outside the professional ranks as Jack Taylor, a sophomore guard at Iowa's Grinnell College, shattered the National Collegiate Athletic Association (NCAA) scoring record with a 138-point performance in a Division III game.
The 22-year-old guard from Iowa's Grinnell College, drew national attention for his performance, which shattered the previous record of 113 points set in 1954.
"That's crazy," said five-time NBA champion Kobe Bryant, "I don't care what level you're at, you score 138 points, it's pretty insane."

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NBA-Timberwolves end Thunder's 12-games winning streak

Dec 20 (Reuters) - The Minnesota Timberwolves, boosted by a brilliant fourth quarter from diminutive guard J.J. Barea, beat Oklahoma City 99-93 on Thursday to end the Thunder's 12-games winning streak.
The NBA-leading Thunder battled back after an early 14-points deficit to move within a point at 76-75 early in the fourth before Barea took over.
Barea scored 10 points in a 12-2 run that restored Minnesota's double-digit lead at 88-77 and then helped the T-Wolves hold off the Thunder the rest of the way.
The loss dropped Oklahoma, last year's losing NBA Finalists, to 21-5 while Minnesota improved to 13-11, seven games behind the Thunder in the Western Conference's Northwest Division.
Kevin Love led Minnesota with 28 points and 11 rebounds, and center Nikola Pekovic had 24 points and 10 boards, while Barea came off the bench to score 18 points.
Three-times scoring champion Kevin Durant paced the Thunder with 33 points, and Russell Westbrook added 30, but Oklahoma City's reserves contributed seven points in all. (Reporting by Larry Fine in New York, Editing by Peter Rutherford)

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UPDATE 1-NBA-Timberwolves end Thunder's 12-games winning streak

T-Wolves snap Thunder winning streak
* End their own losing skid against Oklahoma City (Adds details, quotes)
Dec 20 (Reuters) - The Minnesota Timberwolves, boosted by a brilliant fourth quarter from diminutive guard J.J. Barea, got a welcome shot of confidence with a 99-93 win over Oklahoma City on Thursday to snap the Thunder's winning streak at 12 games.
The uplifting win for the T-Wolves, coming off a pair of losses on a California road trip, snapped their own 12-game losing streak against Oklahoma City.
The NBA-leading Thunder battled back after trailing by 14 to move within a point at 76-75 early in the fourth before Barea took over.
Sinking long three-pointers and scrambling under the hoop, Barea scored 10 points in a 12-2 run that restored Minnesota's double-digit lead at 88-77 and then helped the T-Wolves hold off the Thunder the rest of the way.
"The fourth quarter for us has kind of been our Achilles heel this whole season, but we fought through and J.J. Barea was awesome tonight," said Minnesota's All Star forward Kevin Love.
The loss dropped Oklahoma, last year's losing NBA Finalists, to 21-5 while Minnesota improved to 13-11, seven games behind the Thunder in the Western Conference's Northwest Division.
Love led Minnesota with 28 points and 11 rebounds, and center Nikola Pekovic of Montenegro had 24 points and 10 boards, while Puerto Rico's Barea came off the bench to score 18 points.
Three-time scoring champion Kevin Durant paced the Thunder with 33 points, and Russell Westbrook added 30, but Oklahoma City's reserves contributed just seven points in all.
"This is a big win here against one of the top teams in the league," said Love, a team mate of Durant and Westbrook on the U.S. basketball team that won gold at the London Olympics.
"We learned we can fight through and beat any team in the league if we're playing well.
"Soon as guys really get in shape, get back healthy, and Ricky (Rubio) starts playing the way he's capable of playing and gets back from that injury, we're going to be a lot better team."
Spanish guard Rubio, working his way back from a serious knee injury, played 18 minutes without scoring for Minnesota but handed out three assists and had three rebounds.
The Timberwolves used brisk ball movement to spring Pekovic for easy layups and set up Love for open looks beyond the three-point arc as they went on a 19-6 run for a 25-11 lead in the first quarter.
Oklahoma City closed within seven points in the second quarter and got within five after intermission but Minnesota responded each time to restore a cushion, with Barea doing the job in the fourth quarter.

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Barea, Wolves snap Thunder's 12-game streak

MINNEAPOLIS (AP) — Kevin Durant and the Oklahoma City Thunder have been blowing the doors off the rest of the Western Conference in these first two months, playing with the swagger born of their run to the NBA Finals last season.
J.J. Barea and the Minnesota Timberwolves tried to send a message on Thursday night that a second straight trip isn't going to come easy.
Playing with the tenacity that made him so important to the Mavericks' run to the title two years ago, Barea scored 14 of his 18 points in the fourth quarter to help the Timberwolves snap Oklahoma City's 12-game winning streak with a 99-93 victory over the Thunder.
Kevin Love had 28 points, 11 rebounds and seven assists and Nikola Pekovic had 24 points and 10 rebounds for Minnesota. But it was Barea who was the key, scoring 12 straight at one point for the Wolves to hold off the team with the best record in the league.
"It's important," coach Rick Adelman said of beating the best in the West. "But I would like to see us get to a point where this is not a big deal. It's a big game against the best team, but this is something we can do."
Kevin Durant had 33 points, seven rebounds and six assists and Russell Westbrook had 30 points, 11 rebounds and nine assists for the Thunder, who had not lost a game since Nov. 23 at Boston.
"It's not the end of the world. A lot of people said the world is going to end today, tomorrow, but it's not the end of the world," Durant quipped. "We lost to a good team (Thursday). They came out and played extremely hard and they beat us. We're 21-5 and we've just got to go back and work."
That it was Barea, and not the Olympian Love or the sensation Ricky Rubio who was chiefly responsible was the biggest surprise of all.
Barea didn't join the Timberwolves until training camp had already started last season, then languished through the first injury plagued year of his career. Finally healthy, he's getting back to the super pest that helped the Dallas Mavericks to the title two years ago.
With the Thunder charging early in the fourth quarter, the smallest guy on the court played the biggest.
After Durant's two free throws cut Minnesota's lead to 80-77, Barea hit two 3s and scored on a putback under the rim amid the tall trees, an 8-0 run by himself that gave the Wolves a little breathing room. His long 3 with 5:26 to play made it 92-81, and the Wolves held on.
"I love it," Barea said. "We just needed a little bit more tonight, a little energy and I'm glad I was able to provide that for us tonight."
Barea was also a nuisance on defense, drawing an offensive foul on Durant with 2:24 to play. The normally super-cool Durant uncharacteristically lost his composure, picking up a technical foul for arguing the call as well.
"Seems like him and Kevin Love don't miss against us," Durant said of Barea, who tormented them in the Western Conference finals in 2011 and had a triple-double in a double-overtime loss to the Thunder last season. "Seems like every team has that guy and I think those are the guys against us. Next time we've just got to do a better job."
Serge Ibaka had 14 points and nine rebounds, but Westbrook missed 19 shots and turned the ball over eight times in an off night.
Alexey Shved had 12 points, 12 assists and seven rebounds for the Wolves, who are trying to claw their way back to respectability after years at the bottom of the Western Conference.
With a nucleus of Love, Rubio and Pekovic, there is optimism here for the first time in a long time.
The Thunder stormed into Target Center riding the longest winning streak since the team moved to Oklahoma City, bullying opponents by an average of 14.2 points per game as they warm up for a run at a second straight finals appearance.
Rubio was playing his third game since being activated from a torn ACL in his left knee that had kept him out since March 9. He had a scintillating debut last Saturday, throwing no-look passes between his legs and looking as if he'd never left. But it's been slower going in the ensuing two games. He was a non-factor in a loss in Orlando on Monday and had trouble getting going again against the Thunder.
His handle wasn't nearly as sticky as usual and he was thwarted every time he tried to penetrate, then could be seen wincing in pain after an awkward landing on a shot in the second quarter. Adelman immediately pulled him, but Rubio was able to return in the second half.
"We battled, we fought. I'm proud of our guys," Thunder coach Scott Brooks said. "We had a great streak, a great month going. But we lost to a very good team. We knew sooner or later they were going to get hot. They got hot tonight."
NOTES: Kevin Martin did not play for the Thunder because of a right thigh contusion. ... The Timberwolves waived G/F Josh Howard on Thursday after an MRI revealed a torn ACL in his right knee. ... The Thunder lost for the first time in six tries on the second night of a back to back.

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