APNewsBreak: Texas cancer probe draws NCI scrutiny

The National Cancer Institute confirmed Friday that federal officials are taking a closer look at a troubled $3 billion cancer-fighting effort in Texas that is under a criminal investigation over a lucrative taxpayer-funded grant awarded by the state agency.
The Cancer Prevention and Research Institute of Texas touts its status as an NCI-approved funding entity — an exclusive group headlined by the nation's most prominent cancer organizations. The list is fewer than two dozen and includes the American Cancer Society, Susan G. Komen for the Cure and federal entities like the Center for Disease Control and Prevention.
The designation is a federal seal-of-approval that signals high peer review standards and conflict of interest policies. Yearlong turmoil within the Texas institute, or CPRIT, reached a new peak this week when the agency's beleaguered chief executive asked to resign and prosecutors opened cases following an $11 million grant to a private company that was revealed to have bypassed an independent review.
NCI spokeswoman Aleea Farrakh Khan told The Associated Press that officials are "evaluating recent events" at CPRIT. She said officials have not made decisions or contacted the agency directly.
Members of CPRIT's governing board did not immediately return an email seeking comment.
An NCI designation is not required for CPRIT to continue running the nation's second-largest pot of cancer research dollars, Khan said. But jeopardizing that status — and especially losing it — would be a severe blow to CPRIT's reputation, which already has been battered by sweeping resignations, internal accusations of politics trumping science and now a criminal investigation.
A recent internal audit at CPRIT discovered an $11 million funding request from Dallas-based Peloton Therapeutics was approved without the agency ever scrutinizing the proposal's merits. The revelation came only months after two Nobel laureates and other top scientists left the agency in protest over a $20 million grant some accused of being rushed to approval without a proper peer review.
While CPRIT is funded by taxpayers, donors to cancer nonprofits might look to an NCI designation for assurance that their money is in good hands.
"It says, 'If I'm donating money to this agency, if NCI is approving them, that means NCI says it's handling its money well,'" Khan said.
Khan added that CPRIT's inclusion on the list does not mean all of its funding mechanisms are NCI-approved.
There is no funding relationship between the NCI and CPRIT.
An entire page of CPRIT's website is devoted to boasting its NCI designation. The agency says the status is important because it means cancer centers in Texas seeking its own NCI designation — so as to reassure patients or bolster recruitment — can include CPRIT research dollars in their calculations to maintain levels needed to be NCI approved.
"This enhances Texas' ability to leverage additional federal funding for cancer research and raises Texas' profile as a center for cancer research," according to the website.
Executive Director Bill Gimson submitted his resignation letter Tuesday but offered to stay on through January. He has described Peloton's improper funding as an honest mistake and said no one associated with CPRIT stood to personally profit from the company's award.
Prosecutors have not made any specific criminal allegations. Launching separate investigations into CPRIT are the Texas attorney general's office and the Travis County district attorney's public integrity unit, which investigates criminal misconduct within state government.

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Mental health toll emerges among Sandy survivors

The image of his brother trapped in a car with water rising to his neck, his eyes silently pleading for help, is part of a recurring nightmare that wakes Anthony Gatti up, screaming, at night.
Gatti hauled his brother out of the car just in time, saving his life at the height of Superstorm Sandy. The two men rode out the hurricane in their childhood Staten Island home and survived. But weeks afterward, Gatti still hasn't moved on.
Now he's living in a tent in the backyard, burning pieces of furniture as firewood, refusing to leave until the place is demolished. Day and night, he is haunted by memories of the storm.
"My mind don't let me get past the fact that I can't get him out of the car. And I know I did," Gatti said, squeezing his eyes tightly shut at the memory. "But my mind don't let me think that. My mind tells me I couldn't save him, he dies."
As communities battered by Sandy clear away the physical wreckage, a new crisis is emerging: the mental and emotional trauma that storm victims, including children, have endured. The extent of the problem is difficult to measure, as many people are too anxious to even leave their homes, wracked by fears of wind and water and parting from their loved ones. Others are too busy dealing with losses of property and livelihood to deal with their grief.
To tackle the problem, government officials are dispatching more than 1,000 crisis counselors to the worst-hit areas in New York and New Jersey, helping victims begin the long work of repairing Sandy's emotional damage.
Counselors are assuring people that anxiety and insomnia are natural after a disaster. But when the trauma starts to interfere with daily life, it's probably time to seek help. And in a pattern that played out in New Orleans and the Gulf Coast after Hurricane Katrina in 2005, symptoms may only get worse as victims transition from the initial shock to the disillusionment phase of the recovery.
"Folks are starting to realize that they may be in this for the long haul," said Eric Hierholzer, a commander in the U.S. Public Health Service. "And things aren't necessarily going to get better tomorrow or next week."
At St. John's Episcopal Hospital in Far Rockaway, the psychiatry department has recorded a 20 percent increase in walk-in patients since the storm hit, with residents reporting the whole gamut of stress-related symptoms. Anxiety. Insomnia. Panic attacks.
Local schools have referred 25 percent more children than usual to the hospital's outpatient mental health programs.
"The children are very, very traumatized," said Fern Zagor, who runs the Staten Island Mental Health Society. "They have a hard time making sense of this sudden change in their world. It's frightening to them."
A 5-year-old girl who was pulled from floodwaters clinging to her father hasn't been able to attend kindergarten since the storm, Zagor said, because she's too traumatized to be parted from him now. An 11-year-old boy is working with counselors after floating in water up to his neck on the second floor of his home for several hours before being rescued.
"This child has said he worries about rain," Zagor said. "He worries about whether he'll ever want to swim in a swimming pool again."
The society is among many mental health providers who are working with Project Hope, a New York crisis counseling program funded by an $8.2 million Federal Emergency Management Agency grant that has just begun sending counselors to local communities. New York Gov. Andrew Cuomo's office estimates the program will help more than 200,000 people.
Project Hope Counselor Yomira Natera has been seeking out storm victims who don't speak English as their first language.
"We've seen an increase in substance abuse with folks who may have language barriers," she said, "who may be frustrated with the system, who find it difficult to communicate."
At least 20,000 people have so far made contact with counselors from the New Jersey Hope and Healing Program, which has dispatched hundreds of state-trained disaster crisis response counselors into the storm zone. The state also launched a hotline for people to call and talk to a counselor.
In Union Beach, N.J., a working-class enclave on Raritan Bay, Kathy Parsells volunteered at a FEMA recovery center on a recent afternoon, helping to coordinate deliveries. Her daughter and grandchildren had to be rescued during the storm.
"I'm OK," she said, stifling tears. "My grandsons have nightmares. My grandson, the first night, was screaming: 'It's coming up the stairs.'"
Jeannette Van Houten, who lost her home in Union Beach, said in a telephone interview that she feels like she's going through the same stages of grief that she endured when her niece was murdered in 2008.
"I have days that I can't put a thought together. Like you start talking and you forget what you're saying," said Van Houten, who sleeps just two or three hours on a good night nowadays. "And the numbness, like you look at things that are happening around you, but you're not part of it."
The Rev. Matthew Dowling, a pastor at the Monmouth Church of Christ in Tinton Falls, N.J., volunteered as a crisis counselor in the days after the storm and heard a lot of survivor's remorse from people who were more fortunate than their neighbors. But there was also a great deal of frustration.
"When FEMA arrives, they think everything is going to be fixed," Dowling said. "The reality is it's going to take months and months to get back to normal. Just like the steps of grief there's anger at the new normal."
Distress calls to LifeNet, New York City's local crisis hotline, doubled during the first few weeks after the storm hit, averaging more than 2,000 calls per week from people who were angry and worried that basic needs — food, clothing, shelter — had not been met.
Officials are now preparing for a new wave of calls from people struggling with depression and other mental health issues, said Christian Burgess, director of the Disaster Distress Helpline, a national crisis hotline run by the federal government that provides a network of trained counselors in the aftermath of a major disaster.
Coming to grips with the loss of everything she owned has been difficult for Carol Stenquist, who stood outside borough hall in Union Beach, nervously dragging on a cigarette and crying.
"I have anxiety over it. Even when I lay down at night I feel my heart palpitating with the loss of everything," said Stenquist, whose home was destroyed. "I was there for 20 years."
She thinks she needs to talk to a professional counselor, but hasn't sought one out yet.
"I'm kind of afraid that the emotional stuff I feel now is just part of what I'm going to feel when it's over," she said. "I've had my breakdowns, cries, feelings of depression. I've had all of that."
On Staten Island, volunteers have been quietly stopping by Anthony Gatti's tent to check in on him during his long vigil, dropping off boxes of cereal and cans of coffee. A volunteer therapist tried to talk him into leaving, but to no avail. He spends his days patrolling the property for looters and gazing at photos of the storm's destruction on his laptop.
"I keep trying to make him understand. It's a lot of wood and metal and pipes, that's all it is," said his mother, Marge Gatti. "You've got to get numb. You gotta get tough. If I'm not numb, I can't function.

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GlaxoSmithKline wins U.S. approval for new flu vaccine

U.S. health regulators have approved a new four-strain seasonal influenza vaccine made by GlaxoSmithKline Plc, the company said on Monday.
The U.S. Food and Drug Administration has approved Fluarix Quadrivalent to immunize children age 3 and older and adults against flu virus subtypes A and B contained in the vaccine.
It is the first intramuscular vaccine to protect against four influenza strains. Three-strain flu vaccines currently administered help protect against the two most common A virus strains and the B strain expected to be predominant in a given year, the company said.
Since 2000, however, two B virus strains have circulated to varying degrees each season, meaning patients infected with the B virus not contained in the vaccine were not immunized.
Fluarix Quadrivalent helps protect against the two A strains and adds coverage against a second B strain, the company said.
Three-strain vaccines "have helped protect millions of people against flu, but in six of the last 11 flu seasons, the predominant circulating influenza B strain was not the strain that public health authorities selected," said Dr. Leonard Friedland, head of clinical development and medical affairs for Glaxo's North American vaccines program.
"Fluarix Quadrivalent will help protect individuals against both B strains and from a public-health standpoint, can help decrease the burden of disease."
Glaxo said it will make the vaccine available in time for the 2013-14 flu season and plans to fulfill orders for its trivalent, or three-strain, vaccines. Healthcare providers traditionally order flu vaccines about a year in advance of each flu season.
Fluarix Quadrivalent is not currently approved or licensed in any country outside of the United States.

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Inherited colon cancer risk tied to certain foods

Among people who have a genetic susceptibility to colon cancer, those whose diets are heavy in junk food have an even higher risk, according to a new study.
"These patients have this very high risk because of this (genetic) mutation they have, but it might be that they could reduce the number of (tumors) by having a more healthy lifestyle," said Akke Botma, the lead author of the study.
Botma's study is just the first to find a link between certain foods and a higher colon cancer risk in this group, and it can't prove that the diet is to blame.
All of the people in the study had Lynch syndrome, a genetic disorder that predisposes people to cancer at younger ages and that affects up to one in 660 people.
In Western countries, colorectal and endometrial cancers are the dominant cancers to turn up in people with the syndrome, while in Asia it's mostly stomach cancer, Botma said.
Up to 70 percent of people with Lynch syndrome will develop colon cancer. Among people without Lynch syndrome, such cancers are thought to be influenced by diet, particularly alcohol and red and processed meat, the authors note in their study, published in the journal Cancer.
Botma and her colleagues at Wageningen University in the Netherlands contacted 486 people with Lynch syndrome from a national database of families with inherited risks for cancer.
At the beginning of the study they surveyed the participants about what they ate, and they ranked each person on whether he ate low, medium or high amounts of foods within four dietary categories.
The food groups included one that was dominated by fruits, vegetables and whole grains; another that was high in meat and coffee; a third dietary group that resembled a Mediterranean diet - fish, leafy greens, pasta, sauces and wine; and a fourth group that was heavy on fried snacks, fast food and diet soda.
Botma and her colleagues found that, over 20 months of follow up, 56 of the participants -- or 12 percent -- screened positive for tumors in the colon, a precursor to cancer.
Of the four dietary groupings, only the junk food category showed any link with a different risk for developing colon tumors.
Of the 160 people who scored low on the junk food diet, 17 developed tumors, while 18 out of the 160 people who ate the most junk food developed tumors.
The numbers initially seemed similar, but after taking into account smoking and other risk factors, the researchers determined that those in the high junk food group were twice as likely to develop colon tumors.
HOW TO MANAGE RISKS?
"It's hard to say why" junk food is linked with a greater risk for these tumors, said Dr. Mala Pande, an instructor at the University of Texas MD Anderson Cancer Center in Houston who was not involved in the research.
She said some researchers have suggested that high fat might have something to do with it, but it's impossible to conclude that from this study.
Although the findings are too preliminary to be used in making dietary recommendations to people with Lynch Syndrome, the study was valuable in launching research into the possible role of certain foods on cancer risk, said Christopher Amos, a professor at the Geisel School of Medicine at Dartmouth College.
"People with Lynch Syndrome are at higher risk, and we'd really like to know how to manage their risks better," Amos, who was not part of the study, told Reuters Health.
Certain foods have been shown to be linked with different types of cancer, but many of those studies contradict each other and sow confusion (see Reuters Health report of December 5, 2012 here: http://reut.rs/YPuDcs).

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Global malaria battle stalls as financing gets tight

Global funding for the fight against malaria has stalled in the past two years, threatening to reverse what the World Health Organisation (WHO) says are "remarkable recent gains" in the battle to control one of the world's leading infectious killers.
After rapid expansion between 2004 and 2009, funding for malaria prevention and control leveled off between 2010 and 2012 - meaning there were fewer life-saving steps taken in hard- hit malarial regions such as sub-Saharan Africa.
"If we don't scale up vector control activities in 2013 we can expect major resurgences of malaria," said Richard Cibulskis, lead author of the WHO's World Malaria Report, which was published on Monday.
"Vector control" means stopping transmission of the disease with tools such as treated mosquito nets. The report found that deliveries of such nets to endemic countries in sub-Saharan Africa dropped from 145 million in 2010 to an estimated 66 million in 2012.
"This means that many households will be unable to replace existing bed nets when required, exposing more people to the potentially deadly disease," the report said.
Malaria is caused by a parasite carried in the saliva of mosquitoes and kills hundreds of thousands of people a year, mainly babies and children under the age of five in Africa.
According to WHO data, the disease infected around 219 million people in 2010, killing around 660,000 of them. Robust figures are, however, hard to establish and other health experts say the annual malaria death toll could be double that.
GLOBAL TARGETS
An estimated $5.1 billion a year is needed between 2011 and 2020 to get malaria medicines, prevention measures and tests to all those who need them in the 99 countries which have on-going transmission of the disease.
"Essentially, with the tools that we've got, we need to make sure that we continue the investments in the control measures that we have," Cibulskis told a news conference in Geneva.
"If we don't do that, malaria will bounce back. As soon as you take bed nets away, malaria will come back. If you stop indoor residual spraying, it will come back, and with a vengeance. So yes, we need to keep on investing in malaria ultimately until new tools are developed."
The WHO says while many countries have increased financing for malaria, the total available global funding remained at $2.3 billion in 2011 - less than half of what is needed.
"Global targets for reducing the malaria burden will not be reached unless progress is accelerated in the highest burden countries," Robert Newman, director of the WHO Global Malaria Programme, said in statement with the report.
"These countries are in a precarious situation and most of them need urgent financial assistance to procure and distribute life-saving commodities."
The WHO report found that by far the greatest impact of malaria is concentrated in 14 endemic countries which account for an estimated 80 percent of malaria deaths.
Nigeria and the Democratic Republic of the Congo are the most affected countries in sub-Saharan Africa, while India is the hardest hit in South East Asia.
WHO director general Margaret Chan wrote in a forward to the report that there is now an urgent need to identify new sources of funding to boost and sustain malaria control.
"We also need to examine new ways to make existing funds stretch further by increasing the value for money of malaria commodities and the efficiency of service delivery," she said.
The Roll Back Malaria Partnership, which includes the WHO, UNICEF and the World Bank, said it was already exploring several options, including financial transaction taxes, airline ticket taxes and a potential "malaria bond" to encourage more involvement from private sector investors.
Fatoumata Nafo-Traore, executive director of the Roll Back Malaria Partnership, said Mozambique and one other African country were preparing to pilot such a bond in 2013, with the hope that other countries would follow their example.

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Analysis: Democrats' discord undercuts Obama estate tax push

 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

 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

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.

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Obama says Republican "fiscal cliff" plan out of balance

 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

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.
"It is a very important part of the tax code but once you start picking winners and losers in the tax code, how do you get ... the big deal done?

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