Thatcher papers show fascination with Reagan visit

LONDON — It is not often that the president of the United States needs to seek fashion advice. But when Ronald Reagan was getting ready for a visit to England as a guest of Queen Elizabeth II in June 1982, his people had an important question for the Brits: Just what does one wear to go riding with the queen in the magnificent horse country surrounding Windsor Castle? The answer: Something smart, but casual, of course. Riding boots, breeches and a turtleneck sweater would do fine — no need for formal riding attire. The fashion inquiry is but one tidbit contained in nearly 500 pages of formerly Confidential documents relating to the Reagan visit being made public Friday by Britain's National Archives. The dossier shows the British government — led by Prime Minister Margaret Thatcher — to be extraordinarily interested in pleasing the relatively new president on his two-day visit. British leaders also fretted that perennial cross-Channel rivals might triumph in the tug-of-war for presidential face time in a visit that had to be sandwiched between two summits on the European mainland. The papers show that top Reagan adviser Michael Deaver had a way of annoying his British counterparts with last-minute changes and requests, and also surprised them with some of his objectives. Deaver, remembered as a shrewd image-builder, said he wanted Reagan to be photographed outside of formal venues, so he wouldn't be seen "exclusively in white tie" at palace functions, even suggesting that Reagan go to a village pub to soak up the atmosphere There were raised eyebrows, and bruised feelings, when the White House failed to formally reply in a timely fashion to an official invitation from the queen — the sort of invite that usually commands respect and a prompt reply the world over. The queen's invite was left to languish for weeks and weeks, something that the British believe is simply Not Done. "It is really for the president to respond to her invitation, which he has not done personally, something that I have pointed out several times here," writes Nicholas Henderson, Britain's ambassador to Washington, in a memo to the British Foreign Office. "As you know those surrounding the president are not deliberately rude: It is simply that they are not well-organized and do not have experience of this sort of thing." William F. Sittman, a special assistant to Reagan who was involved in planning the trip, told The Associated Press that it is possible the delay in responding to the queen was caused by first lady Nancy Reagan's insistence on consulting her astrologer before travel plans were finalized. "You have to remember that Mrs. Reagan was very strict about his schedule, and she would consult her astrologer to see if this was the right time to travel," he said. "Sometimes she would back up departures." The documents make clear that Europe's leaders were desperate for Reagan's attention at a time of high Cold War tensions. A memo from U.K. Cabinet Secretary Robert Armstrong on Feb. 5 expresses concern that a gala, summit-closing dinner at the palace of Versailles outside Paris could delay Reagan's arrival in London. But he warns against pressuring the Reagan entourage to skip the meal at Versailles' Hall of Mirrors because "that would not please the President of the French Republic." Reagan's aides also worried the British by suggesting the president might have to skip the stop in London because accepting it might anger the Germans, who had offered a similar invitation. But feelings are smoothed over a bit when the Americans assure the British contingent that the Germans are not America's top priority. "Eagleburger emphasized how much the president himself wanted to go to London," stresses one confidential memo from the British ambassador, referring to senior U.S. diplomat Lawrence Eagleburger. "There should be no doubt about that. Eagleburger also said that at the moment the Germans were not America's favorite allies." The prospect of a chance to relax from international summitry with a bit of horseback riding with the queen seems to have helped carry the day for the Brits. Asked for the president's favorite type of horse, British planners are told simply that he wants a thoroughbred. He ended up riding Centennial, one of the queen's favorites, and wearing a perfectly fitted sports jacket above his sweater, going for an old-time Hollywood look he carried off with ease. Much of the actual visit was devoted to pomp and pageantry, or to relaxation, but Reagan did make one speech of consequence. He became the first American president to address a meeting of both houses of Parliament and used the occasion to trumpet his distaste for the Soviet Union, calling it an economic catastrophe. He said Marxism-Leninism would be left on the ash-heap of history — a prediction that would come to pass in the following decade.

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U.S. suspends embassy operations in rebel-hit Central African Republic

The United States said on Thursday it was suspending operations at its embassy in the Central African Republic as rebels appeared poised to move on the capital of the impoverished but resource-rich nation. U.S. State Department spokesman Patrick Ventrell said the U.S. embassy had temporarily suspended operations and that the U.S. ambassador and other embassy personnel had left the country. "This decision is solely due to concerns about the security of our personnel and has no relation to our continuing and long-standing diplomatic relations with the CAR," Ventrell said in a statement.

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CAR appeals for French help against rebels, Paris balks

The president of the Central African Republic appealed on Thursday for France and the United States to help push back rebels threatening his government and the capital, but Paris said its troops were only ready to protect French nationals. The exchanges came as regional African leaders tried to broker a ceasefire deal and as rebels said they had temporarily halted their advance on Bangui, the capital, to allow talks to take place. Insurgents on motorbikes and in pickup trucks have driven to within 75 km (47 miles) of Bangui after weeks of fighting, threatening to end President Francois Bozize's nearly 10-year-stint in charge of the turbulent, resource-rich country. French nuclear energy group Areva mines the Bakouma uranium deposit in the CAR's south - France's biggest commercial interest in its former colony. The rebel advance has highlighted the instability of a country that has remained poor since independence from Paris in 1960 despite rich deposits of uranium, gold and diamonds. Average income is barely over $2 a day. Bozize on Thursday appealed for French and U.S. military support to stop the SELEKA rebel coalition, which has promised to overthrow him unless he implements a previous peace deal in full. He told a crowd of anti-rebel protesters in the riverside capital that he had asked Paris and Washington to help move the rebels away from the capital to clear the way for peace talks which regional leaders say could be held soon in Libreville, Gabon. "We are asking our cousins the French and the United States, which are major powers, to help us push back the rebels to their initial positions in a way that will permit talks in Libreville to resolve this crisis," Bozize said. France has 250 soldiers in its landlocked former colony as part of a peacekeeping mission and Paris in the past has ousted or propped up governments - including by using air strikes to defend Bozize against rebels in 2006. But French President Francois Hollande poured cold water on the latest request for help. "If we have a presence, it's not to protect a regime, it's to protect our nationals and our interests and in no way to intervene in the internal business of a country, in this case the Central African Republic," Hollande said on the sidelines of a visit to a wholesale food market outside Paris. "Those days are over," he said. Some 1,200 French nationals live in the CAR, mostly in the capital, according to the French Foreign Ministry, where they typically work for mining firms or aid groups. CEASEFIRE TALKS The U.N. Security Council issued a statement saying its members "condemn the continued attacks on several towns perpetrated by the 'SELEKA' coalition of armed groups which gravely undermine the Libreville Comprehensive Peace Agreement and threaten the civilian population." U.S. State Department spokesman Patrick Ventrell said the U.S. embassy had temporarily suspended operations and the U.S. ambassador and other embassy personnel had left the country. Officials from around central Africa are due to meet in Bangui later on Thursday to open initial talks with the government and rebels. A rebel spokesman said fighters had temporarily halted their advance to allow dialogue. "We will not enter Bangui," Colonel Djouma Narkoyo, the rebel spokesman, told Reuters by telephone. Previous rebel promises to stop advancing have been broken, and a diplomatic source said rebels had taken up positions around Bangui on Thursday, effectively surrounding it. The atmosphere remained tense in the city the day after anti-rebel protests broke out, and residents were stocking up on food and water. Government soldiers deployed at strategic sites and French troops reinforced security at the French embassy after protesters threw rocks at the building on Wednesday. In Paris, the French Foreign Ministry said protecting foreigners and embassies was the responsibility of the CAR authorities. "This message will once again be stressed to the CAR's charge d'affaires in Paris, who has been summoned this afternoon," a ministry spokesman said. He also said France condemned the rebels for pursuing hostilities and urged all sides to commit to talks. Bozize came to power in a 2003 rebellion that overthrew President Ange-Felix Patasse. However, France is increasingly reluctant to directly intervene in conflicts in its former colonies. Since coming to power in May, Hollande has promised to end its shadowy relations with former colonies and put ties on a healthier footing. A military source and an aid worker said the rebels had got as far as Damara, 75 km (47 miles) from Bangui, by late afternoon on Wednesday, having skirted Sibut, where some 150 Chadian soldiers had earlier been deployed to try and block a push south by a rebel coalition. With a government that holds little sway outside the capital, some parts of the country have long endured the consequences of conflicts in troubled neighbors Chad, Sudan and the Democratic Republic of Congo spilling over. The Central African Republic is one of a number of nations in the region where U.S. Special Forces are helping local forces try to track down the Lords Resistance Army, a rebel group responsible for killing thousands of civilians across four African nations.

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US shuts embassy in Central African Republic

The State Department has closed its embassy in the Central African Republic and ordered the ambassador and his diplomatic team to leave the country as rebels there continue to advance and violence escalates, U.S. officials said Thursday. A Pentagon spokesman, Lt. Col. Todd Breasseale, said that at the State Department's request, Defense Secretary Leon Panetta had directed U.S. Africa Command to evacuate U.S. citizens and designated foreign nationals from the U.S. Embassy in Bangui "to safe havens in the region." State Department spokesman Patrick Ventrell said the U.S. Embassy had temporarily suspended operations, but not diplomatic relations with the country. "This decision is solely due to concerns about the security of our personnel and has no relation to our continuing and long-standing diplomatic relations" with the Central African Republic, Ventrell said in a statement. Shortly after announcing the evacuation Thursday, the State Department warned U.S. citizens against travel to the Central African Republic, saying it could not "provide protection or routine consular services to U.S. citizens" and urging Americans who have decided to stay to "review their personal security situation and seriously consider departing" on commercial flights. Four days earlier, the State Department had issued a warning recommending against travel to the country and authorizing its non-emergency personnel in Bangui to leave. U.S. officials said about 40 people were evacuated on an U.S. Air Force plane bound for Kenya. The officials spoke on condition of anonymity because they weren't authorized to discuss the details of the operation. The departure of Ambassador Laurence Wohlers and his staff comes as the president of the Central African Republic on Thursday urgently called on France and other foreign powers to help his government fend off rebels who are quickly seizing territory and approaching this capital city, but French officials declined to offer any military assistance. Rebels have seized at least 10 towns across the sparsely populated north, and residents in the capital of 600,000 people fear insurgents could attack at any time. The developments suggest the Central African Republic could be on the brink of another violent change in government, something not new to the impoverished country. The current president, Francois Bozize, himself came to power nearly a decade ago in the wake of a rebellion. Speaking to crowds in Bangui, Bozize pleaded with foreign powers to do what they could. He pointed in particular to France, Central African Republic's former colonial ruler. About 200 French soldiers are already in the country, providing technical support and helping to train the local army, according to the French defense ministry. French President Francois Hollande said Thursday that France wants to protect its interests in Central African Republic and not Bozize's government. Paris is encouraging peace talks between the government and the rebels. President Barack Obama late last year sent about 100 U.S. special operations forces to the region — including Central African Republic — to assist in the hunt for Joseph Kony, the fugitive rebel leader of the notorious Lord's Resistance Army. Forces have been hunting the elusive warlord in Central African Republic, South Sudan and Congo.

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AP Exclusive: Photos show NKorea nuclear readiness

SEOUL, South Korea (AP) — Recent satellite photos indicate North Korea has repaired flood damage at its nuclear test facility and could conduct a quick atomic explosion if it chose. But analysis provided by the 38 North website to The Associated Press on Friday also shows water streaming out of a test tunnel that may cause problems. Washington and others are pushing for U.N. sanctions in response to North Korea's successful long-range rocket launch Dec. 12 that outsiders consider a cover for a banned ballistic missile test. But there's worry that Pyongyang may respond to punishment by conducting its third nuclear test. The analysis of GeoEye and Digital Globe satellite photos from Dec. 13 and earlier was conducted by 38 North, the website for the U.S.-Korea Institute at Johns Hopkins School of Advanced International Studies.

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State tax revenues continue growing in third quarter

WASHINGTON (Reuters) - State tax revenues have grown for more than two years, but they are still suffering the effects of the 2007-2009 recession, according to a report released by the Rockefeller Institute of Government on Thursday.
Using preliminary data, the New York research group found that collection from major taxes increased in 47 states in the third quarter of 2012 from a year before, marking the 11th straight increase.
The recession caused states' revenues to plummet to lows not seen in decades over the course of five quarters. That forced almost all states to make emergency spending cuts, raise taxes, borrow and turn to the federal government for help just as the newly jobless and homeless increased demand for their services.
While revenues have been growing, the increases have been small. According to the institute, revenues "are still far below where they would have been in the absence of the Great Recession." Moreover, when adjusted for inflation, revenues are 5 percent below the peaks they reached in fiscal 2008, the last year before the recession devastated their budgets.
Rockefeller found that personal income tax collections were up 4.5 percent in the quarter ending in September, and sales taxes grew 3.1 percent. Corporate income taxes, which provide only a sliver of revenues, fell 0.5 percent.
In the third quarter of 2011, personal income tax collections surged 10.2 percent.
Delaware had the largest increases in overall tax collections in the third quarter, 11.7 percent, followed by Colorado, 10.3 percent.

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Muni tax break under threat from bipartisan scrutiny in congress

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

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

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

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House Republicans eye limited fiscal cliff bill

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

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Senator Reid rejects Boehner "fiscal cliff" backup plan

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

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