Justice weighs action against Moody's

(Reuters) - The Justice Department and multiple states are discussing also suing Moody's Corp for defrauding investors, according to people familiar with the matter, but any such move will likely wait until a similar lawsuit against rival Standard and Poor's is tested in the courts.

Inquiries into Moody's are in the early stages, largely because state and federal authorities have dedicated more resources to the S&P lawsuit, said the sources, who were not authorized to speak publicly about enforcement discussions.

Moody's spokesman Michael Adler and Justice Department spokeswoman Adora Andy declined to comment for this story.

Moody's in the past has defended itself against similar allegations, including a 2011 congressional report that concluded the major ratings agencies manipulated ratings to drive business.

The firm previously said Moody's takes the quality of its ratings and the integrity of the ratings process very seriously. It also said the firm has protections in place to separate the commercial and analytical aspects of its business.

The U.S. Justice Department filed a $5 billion lawsuit against S&P late on Monday and accused it of an egregious scheme to defraud investors in the run-up to the financial crisis, fueled by a desire to gain more business.

Shares of McGraw Hill Cos Inc , which owns S&P, have fallen more than 25 percent since news of the lawsuits. Moody's shares have fallen about 15 percent, even though it was not named in any of this week's actions.

"Don't think Moody's is off the hook," said one law enforcement official.

Another rival, Fimalac SA's Fitch Ratings, is unlikely to face similar action, the sources said, since it is a much smaller player in the U.S. ratings industry. The firm also escaped the brunt of scrutiny from congressional investigators.

In a sign of just how high-stakes the battle is, S&P hired prominent defense attorney John Keker, who has represented everyone from cyclist Lance Armstrong to Enron's Andrew Fastow.

S&P said in a statement on Tuesday that the lawsuit is meritless and said it will vigorously defend itself.

A similar coordinated federal-state action against Moody's would follow lawsuits two states have already filed against the ratings firm. Connecticut, which led the states in this week's actions, sued Moody's and S&P in March 2010.

In January a state court in Hartford denied the last of the preliminary motions Moody's had filed to have the case thrown out. That case and the one against S&P are proceeding to trial in the second half of 2014.

Democratic Senator Richard Blumenthal of Connecticut, who as then-attorney general brought the cases against S&P and Moody's in 2010, said he found rampant abuse across the credit rating industry.

"The difference is one of degree and scale rather than essential modus operandi," Blumenthal said in an interview. "S&P is the largest and they did the most sizeable amount of ratings with the largest profits."

CASE THEORY

Those earlier cases and the more recent ones against S&P are based on a theory that the firms misled investors by stating that their ratings on mortgage products were objective and not influenced by conflicts of interest.

Instead, the lawsuits contend, the firms inflated ratings and understated risks as the housing bubble started to burst, driven by a desire to gain more business from the investment banks that issued mortgage securities.

Framing the cases in that manner steers clear of attacking individual ratings, which have largely been shielded under free speech protections. Instead, the focus is on proving false just one statement S&P made - that its ratings were objective.

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Quinn minimum wage hike could be tough sell

Chicago Tribune Springfield correspondent Ray Long analyzes Illinois Gov. Pat Quinn's State of the State speech, saying it was ambitious and much like one heard during a re-election campaign. (Posted on: Feb. 6, 2013.)

It won’t be easy for Democrat Gov. Pat Quinn to find enough lawmakers to vote for the minimum wage increase, what with business groups pronouncing it a “job killer.”

But the best news for Quinn is that key Democratic lawmakers already are lined up behind an idea that’s popular with a large number of low-income workers. Senate President John Cullerton and House Majority Leader Barbara Flynn Currie quickly embraced it. Cullerton flatly predicted, “We’ll be able to pass a minimum wage bill.”

“I support it. It’s very, very popular in Illinois,” Cullerton said. “There is overwhelming support in the electorate.”

The electorate is the target audience in Quinn’s State of the State speech as he ramps up for a 2014 re-election campaign. His office estimated 500,000 Illinoisans could benefit from the wage hike. That’s a huge number of potential supporters who might be easily persuaded to cast a vote for a politician that helped them put more money into their pockets, particularly one like Quinn whose margin of victory in both the 2010 primary and general elections were far from overwhelming.

Republicans, including potential rivals in 2014, refused to get behind the minimum wage hike. House Republican leader Tom Cross of Oswego charged Quinn’s priorities are askew when the “elephant in the room” is the state’s $96.8 billion pension debt — a worst-in-the-nation status that has sent the state’s credit rating into a tailspin.

The pension battle has Quinn locked in a protracted war with union workers who are fighting against any rollbacks in retirement benefits at the same time they are unable to come to terms with the administration on a labor contract.

But as Quinn revealed his minimum wage push to a joint session of the House and Senate, he sought to wrap his arms around the working class, saying Illinois must “honor the productivity of our workers.”

“Our businesses are only as good as the employees who drive their success,” Quinn said. “Nobody in Illinois should work 40 hours a week and live in poverty. That’s a principle as old as the Bible.”

Quinn said the state minimum wage — currently $8.25 an hour — should be bumped up over four years to “at least $10 an hour.”

But beyond the finances, Quinn may hope a populist pocketbook issue can boost his own low approval ratings as he prepares to fight potentially big-name Democratic challengers like Attorney General Lisa Madigan and Bill Daley, the former white House chief of staff and a high-profile heir to the Daley family legacy.

Quinn called for a minimum-wage hike during the 2010 governor’s race, while Republican challenger Sen. Bill Brady opposed it.

Following Quinn’s speech on Wednesday, Brady said he wanted to review Quinn’s plan when there details are rolled out.

Hinsdale Republican Sen. Kirk Dillard, who like Brady is eyeing Quinn’s job, said he does not support the minimum wage hike. “We need to create better jobs, not minimum wage jobs, for those who are trying to raise a family,” Dillard said.

The chief sponsor of the minimum wage increase is Sen. Kimberly Lightford, the Maywood Democrat on Cullerton’s leadership team. She has sought to negotiate with foes and backers of the legislation for eight months. She said she wants to roll out a bill in the next few weeks.

One controversial provision Lightford is working through is her desire to raise the minimum wage for restaurant waiters and waitresses, who get a fraction of $8.25 regular minimum wage and get subsidized by tips.

“Businesses should be able to pay them the full $8.25,” Lightford said. But with smaller restaurants in particular balking, Lightford said, finding a happy medium is “not an easy task.”

Still, she said the chance of passage in the Senate “looks good” because she has been priming colleagues about the issue over the last two years.

“It’s not new today, which is very helpful,” Lightford said.

In a town where a raised eyebrow or a snarl can result in major political ramifications, Lightford said she saw House Speaker Michael Madigan, D-Chicago, clapping when Quinn talked about raising the minimum wage.

“That was a good sign,” Lightford said.

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Segregationist U.S. Senator Thurmond’s biracial daughter dies

CHARLESTON, South Carolina (Reuters) – Essie Mae Washington-Williams, who in 2003 revealed she was the biracial daughter of segregationist U.S. Senator Strom Thurmond, died on Monday at age 87, her attorney said.

Washington-Williams, who had been in declining health in recent years, died of natural causes at a care home in Columbia, South Carolina, said lawyer Frank Wheaton.

Washington-Williams was born in 1925 to a black teenage girl who worked as a maid in Thurmond’s parents’ home when Thurmond was 22. She announced she was Thurmond’s daughter in 2003 after his death at age 100 that year, and the late senator’s family confirmed her claim.

Washington-Williams was a teacher in Los Angeles for three decades and was the mother of four. She moved to South Carolina about five years ago to be closer to a daughter who lived there, Wheaton said.

Her 2006 memoir, “Dear Senator,” detailed her decades-long relationship with her father, the letters they wrote each other and the kindness he showed her personally, which she struggled to reconcile with his opposition to civil rights and his defense of racial segregation.

“She was very low-key and never wanted to rock the boat, I think that’s why she kept her secret until he died,” said William Stadiem, who co-wrote “Dear Senator.”

Stadiem said Thurmond had great affection for Washington-Williams‘ mother, Carrie Butler.

“The fact he stayed close to Essie for all those years, it would be so easy for him to say ‘get out of my life, you don’t exist,’ and he didn’t do that,” Stadiem said. “I think she reminded him of her mother.”

Washington-Williams as a young child went to live with her mother’s sister and her husband in Pennsylvania, and it was from him that she took the surname Washington. She adopted the name Williams from her marriage to attorney Julius Williams.

Thurmond began his career as a Democrat but switched to the Republican Party in 1964. In his lifetime, Thurmond said he was not racist but opposed what he saw as excessive federal intervention.

He staged the longest filibuster in U.S. history when he spoke for more than 24 hours against a 1957 civil rights bill that sought to fight the disenfranchisement of blacks in the South by giving new powers to federal prosecutors.

In 2004 a statue of Thurmond outside the South Carolina State House was altered to engrave the name Essie Mae with those of his other four children on the foundation stone.

(Reporting by Harriet McLeod; Writing by Alex Dobuzinskis; Editing by Xavier Briand)

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Personal Health: Effective Addiction Treatment

Countless people addicted to drugs, alcohol or both have managed to get clean and stay clean with the help of organizations like Alcoholics Anonymous or the thousands of residential and outpatient clinics devoted to treating addiction.

But if you have failed one or more times to achieve lasting sobriety after rehab, perhaps after spending tens of thousands of dollars, you’re not alone. And chances are, it’s not your fault.

Of the 23.5 million teenagers and adults addicted to alcohol or drugs, only about 1 in 10 gets treatment, which too often fails to keep them drug-free. Many of these programs fail to use proven methods to deal with the factors that underlie addiction and set off relapse.

According to recent examinations of treatment programs, most are rooted in outdated methods rather than newer approaches shown in scientific studies to be more effective in helping people achieve and maintain addiction-free lives. People typically do more research when shopping for a new car than when seeking treatment for addiction.

A groundbreaking report published last year by the National Center on Addiction and Substance Abuse at Columbia University concluded that “the vast majority of people in need of addiction treatment do not receive anything that approximates evidence-based care.” The report added, “Only a small fraction of individuals receive interventions or treatment consistent with scientific knowledge about what works.”

The Columbia report found that most addiction treatment providers are not medical professionals and are not equipped with the knowledge, skills or credentials needed to provide the full range of evidence-based services, including medication and psychosocial therapy. The authors suggested that such insufficient care could be considered “a form of medical malpractice.”

The failings of many treatment programs — and the comprehensive therapies that have been scientifically validated but remain vastly underused — are described in an eye-opening new book, “Inside Rehab,” by Anne M. Fletcher, a science writer whose previous books include the highly acclaimed “Sober for Good.”

“There are exceptions, but of the many thousands of treatment programs out there, most use exactly the same kind of treatment you would have received in 1950, not modern scientific approaches,” A. Thomas McLellan, co-founder of the Treatment Research Institute in Philadelphia, told Ms. Fletcher.

Ms. Fletcher’s book, replete with the experiences of treated addicts, offers myriad suggestions to help patients find addiction treatments with the highest probability of success.

Often, Ms. Fletcher found, low-cost, publicly funded clinics have better-qualified therapists and better outcomes than the high-end residential centers typically used by celebrities like Britney Spears and Lindsay Lohan. Indeed, their revolving-door experiences with treatment helped prompt Ms. Fletcher’s exhaustive exploration in the first place.

In an interview, Ms. Fletcher said she wanted to inform consumers “about science-based practices that should form the basis of addiction treatment” and explode some of the myths surrounding it.

One such myth is the belief that most addicts need to go to a rehab center.

“The truth is that most people recover (1) completely on their own, (2) by attending self-help groups, and/or (3) by seeing a counselor or therapist individually,” she wrote.

Contrary to the 30-day stint typical of inpatient rehab, “people with serious substance abuse disorders commonly require care for months or even years,” she wrote. “The short-term fix mentality partially explains why so many people go back to their old habits.”

Dr. Mark Willenbring, a former director of treatment and recovery research at the National Institute for Alcohol Abuse and Alcoholism, said in an interview, “You don’t treat a chronic illness for four weeks and then send the patient to a support group. People with a chronic form of addiction need multimodal treatment that is individualized and offered continuously or intermittently for as long as they need it.”

Dr. Willenbring now practices in St. Paul, where he is creating a clinic called Alltyr “to serve as a model to demonstrate what comprehensive 21st century treatment should look like.”

“While some people are helped by one intensive round of treatment, the majority of addicts continue to need services,” Dr. Willenbring said. He cited the case of a 43-year-old woman “who has been in and out of rehab 42 times” because she never got the full range of medical and support services she needed.

Dr. Willenbring is especially distressed about patients who are treated for opioid addiction, then relapse in part because they are not given maintenance therapy with the drug Suboxone.

“We have some pretty good drugs to help people with addiction problems, but doctors don’t know how to use them,” he said. “The 12-step community doesn’t want to use relapse-prevention medication because they view it as a crutch.”

Before committing to a treatment program, Ms. Fletcher urges prospective clients or their families to do their homework. The first step, she said, is to get an independent assessment of the need for treatment, as well as the kind of treatment needed, by an expert who is not affiliated with the program you are considering.

Check on the credentials of the program’s personnel, who should have “at least a master’s degree,” Ms. Fletcher said. If the therapist is a physician, he or she should be certified by the American Board of Addiction Medicine.

Does the facility’s approach to treatment fit with your beliefs and values? If a 12-step program like A.A. is not right for you, don’t choose it just because it’s the best known approach.

Meet with the therapist who will treat you and ask what your treatment plan will be. “It should be more than movies, lectures or three-hour classes three times a week,” Ms. Fletcher said. “You should be treated by a licensed addiction counselor who will see you one-on-one. Treatment should be individualized. One size does not fit all.”

Find out if you will receive therapy for any underlying condition, like depression, or a social problem that could sabotage recovery. The National Institute on Drug Abuse states in its Principles of Drug Addiction Treatment, “To be effective, treatment must address the individual’s drug abuse and any associated medical, psychological, social, vocational, and legal problems.”

Look for programs using research-validated techniques, like cognitive behavioral therapy, which helps addicts recognize what prompts them to use drugs or alcohol, and learn to redirect their thoughts and reactions away from the abused substance.

Other validated treatment methods include Community Reinforcement and Family Training, or Craft, an approach developed by Robert J. Meyers and described in his book, “Get Your Loved One Sober,” with co-author Brenda L. Wolfe. It helps addicts adopt a lifestyle more rewarding than one filled with drugs and alcohol.

This is the first of two articles on addiction treatment.

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Penny Pritzker a candidate for Commerce secretary

Chicago businesswoman Penny Pritzker has been a prominent Barack Obama friend and supporter since his early days in politics and ran his 2008 campaign fundraising operation. (Zbigniew Bzdak, Chicago Tribune / April 8, 2011)

By Katherine Skiba and Christi Parsons




Washington bureau

7:30 p.m. CST, February 6, 2013

Chicago businesswoman Penny Pritzker has emerged as a leading candidate to serve in the administration of President Obama, for whom she has long been a campaign supporter and top fundraiser.

A senior administration official cautioned that no announcement is imminent and that Obama has made no decision. But Pritzker is under consideration to serve as Commerce secretary or perhaps in another senior position involving relations between Obama and business leaders, according to officials close to the process who spoke anonymously to comment on internal deliberations.

Pritzker is a member of the Chicago family behind the Hyatt Hotels Corp. She has been a prominent Obama friend and supporter since his early days in politics and ran his 2008 campaign fundraising operation.

 She is founder and CEO of PSP Capital Partners and the Pritzker Realty Group, as well as chair of the Artemis Real Estate Partners. She is also a member of the Chicago Board of Education and has had two White House appointments, serving on the President’s Council on Jobs and Competitiveness and the President’s Economic Recovery Advisory Board.

Forbes’ annual list of the world’s billionaires last March put Pritzker at No. 719 and said her hotels and investments were worth $1.8 billion.

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Northwestern-Cubs deal: 5 Wrigley football games

Football coach Pat Fitzgerald talks about the Northwestern-Cubs partnership Tuesday at Wrigley Field.

The partnership announced Tuesday between the Cubs and Northwestern was so logical, so low-stress, that Cubs executive Crane Kenney described it this way: “This wasn’t (just) a bunch of lawyers in a room. It was really based on friendships. There are a lot of ways we can help each other. Mostly this was done with a handshake and a thank you.”

Said NU athletic director Jim Phillips: “It wasn’t strenuous. It was: ‘Let’s work this out.’ But we do have something more than just a handshake.”

Let’s examine some of the fine print by asking and answering some questions …

How many more football games are to be scheduled at Wrigley Field?

Five. The first will be in 2014 and then, depending on the Wrigley Field renovation schedule, they might be spread out over six to eight years. That’s all to be determined.

As are the opponents?

Indeed. The Big Ten barely knows how many schools it has, let alone what the 2014 schedule will look like with Rutgers and Maryland. The NU games are likely to be played in November to avoid a potential playoff conflict in October (don’t laugh), but Phillips would not rule out a September date.

Getting approval from the Big Ten will be a formality, and coach Pat Fitzgerald said of the opponent: “Knowing how much our entire conference values Chicago, I doubt any of my colleagues would balk at it. Of course we’re over-paranoid, so they would want to know about (the logistics). I’ll say: ‘Have your AD call my AD and I’ll see you at the 50-yard line at the 40-minute mark before the game.’ ”

Why no game in 2013?

Phillips wanted to give NU season-ticket holders more of a heads-up.

Wait, wasn’t there an issue the last time football was played at Wrigley?

Oh, you mean how both offenses had to use the same end zone? Kenney said creating enough space for a 12-foot perimeter around the field that satisfies the NCAA will not be an issue. It involves “filling in” the third-base dugout and removing a piece of the wall by the CBOE seats down the third-base line: “Ultimately as part of the restoration plan, you would create the home dugout in a way that it could basically come apart in the offseason.”

What other NU sports teams will play at Wrigley?

First up, NU baseball will be host to Michigan on April 20.

Coach Paul Stevens said that after he told his players, “they were just elated. The energy, the attitude and the enthusiasm have never been like that in any single practice.”

And then …

Kelly Amonte Hiller will bring her seven-time national champion women’s lacrosse team to Wrigley for a 2014 spring game against Notre Dame. NU officials hope they will attract new fans to the sport.

“I have a couple of young girls,” said Phillips, the father of five. “We need great role models.”

And then …

It’s up for grabs among other NU teams such as softball and soccer. Or baseball or lacrosse could get another shot. The deal lasts a minimum of five seasons.

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Smooth-singing Josh Groban offers edgier sound on new album

LOS ANGELES (Reuters) – After selling more than 22 million albums in the United States and becoming a staple in the classical music field, singer Josh Groban is embracing an edgier sound for his latest record, “All That Echoes,” out on Tuesday.

Groban, 31, put together a collection of covers and original songs for the album, including a rendition of one of his personal favorites, “Falling Slowly” from the movie and stage musical “Once.”

Under the guidance of veteran producer Rob Cavallo, the Warner Bros. Records chairman who has worked with rockers like Green Day, Goo Goo Dolls and Paramore, Groban showcases his usual smooth vocals against a more energetic, live-concert sound.

“It’s not about walking out of your lane and scaring people. It’s about slightly expanding what your lane is and allowing all of that to be part of your world,” Groban said in an interview with Reuters.

Along with covers including a rendition of Stevie Wonder’s “I Believe (When I Fall in Love It Will Be Forever),” Groban also wrote original songs, which he said emerged from frustration.

“It was the frustration of hearing songs that were maybe written for me after a little bit of success, going ‘Ahh, is that really what you think I do?’ Yes, I know the other thing was kind of cheesy, but that’s really cheesy,’” the singer said.

“All That Echoes” features original songs such as “Below the Line,” which draws in Latin jazz beats and sweeping ballads such as “Brave” and “False Alarms,” where Groban showcases his powerful voice.

ACTING CHOPS

Groban first found the spotlight in 1999, when he was asked to fill in for ailing Italian tenor Andrea Bocelli at a rehearsal with Canadian singer Celine Dion.

Groban went on to land a short role on TV show “Ally McBeal” in 2001 and released his debut self-titled solo album later that year.

Five studio albums later, Groban has cemented himself at the top of the list of pop-vocal performers. His 2007 holiday record “Noel” became the best-selling U.S. album of the year.

Los Angeles native Groban has also taken small acting roles in TV comedy “The Office, movie “Crazy Stupid Love” and will make a cameo appearance on an upcoming episode of “CSI: NY.”

If he had his dream gig, Groban said he would be fronting rock band Queen for a day. But in the more foreseeable future, he hoped to become a regular face in theater.

“There are only so many albums I’m going to want to make before I decide to go and follow that dream for a minute or longer than a minute,” the singer said.

“I think that there will come a time very soon, hopefully in the next two or three years, where I’ll take out a big chunk of time and dedicate it to theater and do some of that.”

For now, the singer will hit the road in support of his new album, heading to Australia in April before returning to Los Angeles to perform three dates at the Hollywood Bowl in July.

(Reporting By Lindsay Claiborn, writing by Piya Sinha-Roy; Editing by Cynthia Osterman)

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Question Mark: Women’s Eggs Diminish With Age

Baby girls enter the world with enough of them to populate perhaps 40 small cities. A dozen or so years later, the first will make a debut of its own. And in the months and years to come, others will appear regularly, sometimes greeted with relief, other times with disappointment, perhaps most often with a touch of annoyance.

Abdullah Pope/Agence France-Presse — Getty Images

Not women's eggs, obviously.

Now, for women in the baby boom generation, they may be coming more sporadically, or not at all, signaling unmistakably that one time of life is over, and another begun. But what happened to all those eggs?

When girls are born, they have about two million eggs in their ovaries, nestled in fluid-filled cavities called follicles. That may sound like a lot, but consider that months earlier, when they were still in utero, they may have had as many as six or seven million eggs. Those eggs are still immature, and the proper name for them, by the way, is oocytes (rhymes with: nothing).

The first eggs to bite the dust were those in the fetus, which waste away. And by the time a girl reaches puberty, most of her remaining eggs have also deteriorated and been reabsorbed. If that sounds ominously like something from a “Star Trek” episode about the Borg, imagine if all those eggs had to take the customary path out of the body.

Even with the Great Egg Disappearance, girls enter puberty with many more than they will use, 300,000 or more. Each month, the body produces a hormone, FSH, which stimulates the follicles to prepare an egg for maturation and release.

With eggs backed up like bowling balls on a busy Saturday night at the lanes, the ovaries can afford to be a little wasteful, and as many as several dozen follicles are called into action. Then a single mature egg — usually, anyway — gets the tap on the shoulder and begins its travels to the uterus.

As for the maturing eggs that didn’t make the grade, there is no second chance. But they do not go out on their own. “Each month you probably lose a thousand or so,” said Dr. James T. Breeden, president of the American Congress of Obstetrics and Gynecology. “There’s just a natural death of them.”

For all the eggs a woman begins with, in the end only about 400 will go through ovulation. While men produce sperm throughout their lives, over time the number of eggs declines, and they disappear with increasing frequency the decade or so before menopause. Those that remain may decline in quality. “When you have a thousand or less within the ovaries, you’re thought to have undergone menopause,” said Dr. Mitchell Rosen, the director of the Fertility Preservation Center at the University of California, San Francisco.

It’s true that women make far more eggs than they end up using, but men should not pass judgment. “They produce millions of sperm, millions,” Dr. Rosen said. “The whole process is not the most efficient in the world.”

Questions about aging? E-mail boomerwhy@nytimes.com

Booming: Living Through the Middle Ages offers news and commentary about baby boomers, anchored by Michael Winerip. You can follow Booming via RSS here or visit nytimes.com/booming. You can reach us by e-mail at booming@nytimes.com.

This article has been revised to reflect the following correction:

Correction: February 5, 2013

An earlier version of this article incorrectly described estrogen levels at the time of ovulation. They rise, rather than fall.

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Deficit hits 5-year low, but cuts drag economy

WASHINGTON -- The federal deficit will drop to less than $1 trillion for the first time in five years, but massive spending cuts that have improved the budget outlook are also slowing the economy, according to a report released Tuesday by the Congressional Budget office.

The nonpartisan arbiter of federal budgets said the combination of new tax revenue from the "fiscal cliff" deal as well as looming cuts that kick in March 1 will push the deficit down to $845 billion for fiscal 2013. Deficits have topped $1 trillion in recent years.

The projections will fuel the coming budget debates, which started Tuesday as President Obama was calling on Congress to steer around the coming budget cuts.

The budget office said the cuts will contribute to an economy that lags in 2013. The unemployment rate likely will remain above 7.5% through the year. It predicted that the gross domestic product will be well below its potential, growing by just 1.4%, more than half a percentage point slower than would happen if the spending cuts were averted.

At the same time, the nation's debt load is expected to fluctuate but ultimately rise to record levels this decade, largely because of increased spending on healthcare and the federal safety net for older Americans with the aging of the baby boom population.

Additionally, the outlook shows how difficult it will be for House Republicans to accomplish their goal of balancing the budget in 10 years with potentially deep austerity measures.

Even though revenue is rising and spending is decreasing, the overall budget outlook remains stark. By the end of the decade, public debt is set to rise to 77% of GDP, a decade of highs on par with debt levels in World War II.

"The projected path of the federal budget remains a significant concern," the CBO wrote.

Follow Politics Now on Twitter and Facebook

Lisa.mascaro@latimes.com

Twitter: @LisaMascaroinDC

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Alabama hostage standoff ends with gunman dead, boy safe

MIDLAND CITY, Ala. -- The FBI stormed an underground bunker in rural Alabama on Monday, safely rescuing a 5-year-old boy held hostage for nearly a week and leaving his kidnapper, who had also killed a school bus driver, dead.

After a standoff of more than six days, FBI agents struck the bunker when they feared the kidnapped kindergarten student was in “imminent danger,” said Steve Richardson, special agent in charge in Mobile.

Authorities previously had thanked the suspect, identified as 65-year-old Jimmy Lee Dykes, for allowing them to deliver medication, coloring books and toys to the boy, who is due to celebrate his birthday on Wednesday.

But negotiations deteriorated in the 24 hours before agents rescued him, Richardson said during a nationally televised news conference.

“Mr. Dykes was observed holding a gun,” the FBI agent said.

It was not immediately clear how Dykes died.

The standoff gripped a rural corner of southeast Alabama with dread, shuttering local schools and prompting prayers and vigils for the boy identified only as Ethan.

By all accounts, Dykes had taken him from the bus at random, reinforcing concerns that have been raised about U.S. school safety and gun violence since the December shooting deaths of 20 children and six adults at a Connecticut elementary school.

The drama near Midland City, Alabama, began when Dykes, a retired trucker and veteran of the war in Vietnam, boarded a school bus ferrying more than 20 children home from school last Tuesday and demanded the driver let a student off the bus.

PHYSICALLY UNHARMED

When driver Charles Albert Poland Jr., 66, refused, Dykes shot him four times with a 9 mm handgun, local sheriff's department officials said.

Dykes then fled with the child to a homemade bunker on the man's property off a dirt road.

The child was being treated on Monday at a local hospital but appeared physically unharmed, Richardson said. He is said to suffer from Asperger's Syndrome and attention deficit-hyperactivity disorder.

A local law enforcement source said a stun or flash grenade was detonated as part of the operation to free the boy but further details were not immediately released.

Law enforcement officials had offered few insights about Dykes and their negotiations with him ahead of the rescue just after 3 p.m.

Earlier on Monday, Dale County Sheriff Wally Olson said the gunman had a “very complex” story to tell.

“Based on our discussion with Mr. Dykes, he feels like he has a story that's important to him, although it's very complex. And we try to make a safe environment for all for that,” Olson said, without elaborating.

According to neighbors, the notoriously reclusive Dykes moved into the Midland City area about two years ago and was often seen patrolling the property where he lived in a trailer with a gun and flashlight at night.

He had been due to appear for a bench trial last Wednesday after his recent arrest on a menacing charge involving one of his neighbors.

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