Signs Point to Extending All Tax Cuts Temporarily - Wall Street Journal

Congressional aides from both parties have begun discussing a temporary extension of tax cuts enacted under former President George W. Bush, including those for higher earners, laying the groundwork for a possible deal this month.

The conversations, described as preliminary, have been separate from the formal negotiation among lawmakers and Obama administration officials that began on Wednesday. Those negotiations were described as "productive" by people with knowledge of the situation, although Republicans and Democrats publicly remain far apart.

Most Democrats favor permanently extending the Bush-era tax cuts for families making less than $250,000; Republicans want to extend them for everyone, including higher earners. The tax cuts are due to expire at year's end.

A growing number of observers from both parties believe all the talks ultimately are headed toward the same result—a temporary extension of cuts for all the tax levels.

The talks among congressional aides, which have taken place over the past few weeks, have considered short-term extensions of a number of business and individual tax provisions that are expired or expiring, such as a popular research credit and middle-class protection from the alternative minimum tax.

The most likely scenario includes a one-to-three-year extension of the Bush-era income-tax rates and a two-year extension of the business provisions, according to aides. That is likely to be combined with Democratic priorities such as extension of tax breaks that benefit the working poor, as well as further extension of unemployment benefits for the long-term jobless.

Despite the discussions, stalemate still looms as a possibility. The path to an agreement promises to be rocky, with congressional votes on partisan alternatives being planned as soon as Thursday in an effort to reassure party loyalists.

Still, White House officials expressed optimism about a bipartisan compromise, following an initial meeting in the more formal negotiations that began Wednesday among congressional leaders, Treasury Secretary Timothy Geithner and White House budget director Jacob Lew.

"We're in the midst of productive discussions and negotiations around what I think everybody agrees is an issue that has to get done in taxes," said White House spokesman Robert Gibbs. "I think we can get some substantive agreements."

An agreement on temporary extension of all the current rates and breaks would represent a breakthrough after months of infighting. It would signal lawmakers' intent to avoid the economic harm, and public outrage, that could result if the two sides failed to reach a tax deal this month.

Unless Congress acts before Dec. 31, tens of millions of people could see the taxes withheld from their paychecks go up almost immediately. Many retailers and economists worry that this, in turn, could tamp down household spending and further weaken employment and the fragile recovery.

Underscoring that risk, the commissioner of the Internal Revenue Service, Douglas Shulman, sent a letter to lawmakers on Wednesday, warning that postponing extension of some breaks, such as a measure to diminish the bite of the alternative minimum tax, could be "extremely detrimental" and risk significantly delaying refunds.

Rather than take that chance, both parties appear resolved to make a serious effort to reach a deal in the next few weeks.

But even as negotiators began meeting in search of a compromise, both sides were digging in for a public fight. Senate Republican Leader Mitch McConnell (R., Ky.) sent a letter to Majority Leader Harry Reid (D., Nev.) that essentially threatened to filibuster any legislation that doesn't address the GOP's two top priorities for the lame-duck Congress: extending the Bush tax cuts and keeping the government funded after the current continuing resolution expires Friday.

"While there are other items that might ultimately be worthy of the Senate's attention, we cannot agree to prioritize any matters above the critical issues of funding the government and preventing a job-killing tax hike," said the letter, signed by all 42 Republican senators—one more than the 41 votes needed to sustain a filibuster.

That throws up a roadblock before an array of other issues that Mr. Reid has proposed to bring forward in the Senate, among them bills to liberalize immigration law, repeal the Pentagon's "don't ask, don't tell" policy on gays serving openly in the military and extend unemployment benefits that expired Tuesday.

Some Democrats took umbrage at the Republicans' unified move. "It's obstruction," said Sen. Dianne Feinstein (D., Calif.). "It's obfuscation. It brings this body to a halt."Sen. Tom Harkin (D., Iowa) accused Republicans of trying to hold a pending nuclear-weapons treaty hostage to win tax cuts for the upper brackets. He said the year-end settlement might have to include more issues, such as the weapons treaty, for Democrats to support the upper-income tax cuts.

Write to John D. McKinnon at john.mckinnon@wsj.com

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Google Editions e-book venture to launch by year's end - Computerworld

Computerworld - After months of delays, Google will launch its e-book retail business, now being called Google Editions, in the U.S. before the end of the year, a spokesman for the company confirmed today.

The spokesman gave no reason for the delay and declined to offer other details. A Google executive had said in May that the company planned to sell digital books last summer.

The Wall Street Journal reported today that the venture had cleared some technical and legal hurdles and that Google Editions would launch in the U.S. by year's end and internationally in the first quarter of 2011. A federal court recently gave preliminary approval to a settlement agreement between Google and authors and publishers, which apparently has provided further impetus for the Google e-book concept.

Under the Google system, independent booksellers are expected to be able to sell e-books through Google Editions -- and they have received contracts to make that happen, according to the WSJ report. Independent booksellers would benefit the most from Google's concept.

As early as May, Google was saying that it would allow people using a variety of devices to buy books from a broad range of Web sites. Google will compete against Amazon.com, Barnesandnoble.com and Apple, among others, but it could distinguish itself by providing access to a diversity of e-book sources and supporting multiple reading platforms.

Google is expected to allow people to make e-book purchases through Google accounts that they would access through a Web browser. Many smartphones, computers and tablets access the Web through a variety of Web browsers.

Google already offers a service called Google Book Search, which allows people to search and preview millions of books from libraries and publishers globally. The new Google Editions would allow users of Book Search to buy a digital copy of a book, and Google would allow book retailers to sell Google Editions books on their own sites.

It appears that Google Editions is moving forward now in part because of a U.S. District Court in New York's preliminary approval on Nov. 19 of a settlement between Google and authors and publishers. Google has described the agreement on its Web site.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen, or subscribe to Matt's RSS feed. His e-mail address is mhamblen@computerworld.com.

Read more about E-business in Computerworld's E-business Topic Center.

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Estimated Number of Stars May Triple - New York Times

This undercounting of stars in the universe could throw a monkey wrench into astronomers understanding of how galaxies formed and grew over the eons.

This boost in stars, and wishes, comes from a huge number of dim, cool dwarf stars in certain galaxies, astronomers report in an article that the journal Nature published on its Web site on Wednesday

“It’s very problematic,” said Pieter van Dokkum, a professor of astronomy at Yale who wrote the Nature paper with Charlie Conroy of the Harvard-Smithsonian Center for Astrophysics in Cambridge, Mass.

The conundrum is that astronomers cannot actually count the dwarf stars, which have masses less than a third of that of the Sun, in galaxies outside the Milky Way. So instead, they counted the brighter Sun-like stars and then assumed that there were about 100 unseen dwarfs for each larger Sun-like star, as is the case in the Milky Way.

Yet not every galaxy looks like the Milky Way, with its spiraling pinwheel arms. Some are blobby and elliptical, and it was an untested assumption that the distribution of star sizes in elliptical galaxies — where the distribution and density of gas clouds that give rise to stars could be quite different — is the same as in the Milky Way.Dr. van Dokkum and Dr. Conroy took an innovative approach to counting what they could not see. Because the dwarfs are cooler, the fingerprint of certain colors they emit and absorb is different than for larger stars. Thus, while they could not see individual stars, the astronomers could calculate the number of dwarfs required to produce the telltale color fingerprint they detected in the light coming from the whole galaxy.

And they found that in eight elliptical galaxies, that the ratio of dwarf stars to-Sun-like stars was 1,000 or 2,000 to 1, rather than 100 to 1 in the Milky Way. A typical elliptical galaxy, now thought to consist of about 100 billion stars, would actually have one trillion or more stars. Ellipticals account for about a third of all galaxies, leading to the new estimate of three times as many stars over all.

“We may have to abandon this notion of using the Milky Way as a template for the rest of the universe,” Dr. van Dokkum said.

If the findings are correct, an undercount of dwarfs would mean that astronomers have underestimated the masses of galaxies, and that would mean that galaxies developed earlier and faster than currently thought.

“Which would be very interesting, actually,” said Richard Ellis, a professor of astronomy at the California Institute of Technology who was not involved in the research. “It’s very important that papers like this are published so that we are reminded how fragile our knowledge of the universe is.”

Yet Dr. Ellis said he remained skeptical. “A little more convincing may be needed,” he said. “It’s good data and it’s a sound analysis, but there are a few escape clauses.”

For one, the research assumes that the stars in an elliptical galaxy are made of exactly the same stuff as those in spiral galaxies, an assumption that cannot be tested yet.

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