We source all our ingredients locally: McDonald's India

NEW DELHI: Fast food chain McDonald's today disputed the remark of Leader of the Opposition Sushma Swaraj in Parliament that it does not buy local produce, saying all the ingredients used in its products in India are sourced from within the country.

"Before setting up its business in India, McDonald's had made a commitment to government on local sourcing of its entire raw material requirement.

"We confidently and proudly state that ingredients used in our products are sourced locally that includes the French Fries," McDonald's India (North and East) managing director Vikram Bakshi said in a statement.

He was reacting to Swaraj's remark in Parliament during the debate on FDI in retail today that even McDonald's was importing potatoes from abroad and not buying the produce locally.

"We import only on rare occasions when local supplies run out," Bakshi said, adding that "McDonald's remains steadfast to its commitment of working with local suppliers and farmers to source all its requirements in India".

The company, along with its supplier McCain, has worked closely with farmers in India to produce process-grade potato varieties, he claimed.

"We continue to contribute in the growth of these farmers," Bakshi said, adding that when McDonald's began developing its business in India, potatoes with the right quality for 'French Fries' were not available.

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Fossil fuel subsidies in focus at climate talks

DOHA, Qatar (AP) — Hassan al-Kubaisi considers it a gift from above that drivers in oil- and gas-rich Qatar only have to pay $1 per gallon at the pump.

"Thank God that our country is an oil producer and the price of gasoline is one of the lowest," al-Kubaisi said, filling up his Toyota Land Cruiser at a gas station in Doha. "God has given us a blessing."

To those looking for a global response to climate change, it's more like a curse.

Qatar — the host of U.N. climate talks that entered their final week Monday — is among dozens of countries that keep gas prices artificially low through subsidies that exceeded $500 billion globally last year. Renewable energy worldwide received six times less support — an imbalance that is just starting to earn attention in the divisive negotiations on curbing the carbon emissions blamed for heating the planet.

"We need to stop funding the problem, and start funding the solution," said Steve Kretzmann, of Oil Change International, an advocacy group for clean energy.

His group presented research Monday showing that in addition to the fuel subsidies in developing countries, rich nations in 2011 gave more than $58 billion in tax breaks and other production subsidies to the fossil fuel industry. The U.S. figure was $13 billion.

The Paris-based Organization for Economic Cooperation and Development has calculated that removing fossil fuel subsidies could reduce carbon emissions by more than 10 percent by 2050.

Yet the argument is just recently gaining traction in climate negotiations, which in two decades have failed to halt the rising temperatures that are melting Arctic ice, raising sea levels and shifting weather patterns with impacts on droughts and floods.

In Doha, the talks have been slowed by wrangling over financial aid to help poor countries cope with global warming and how to divide carbon emissions rights until 2020 when a new planned climate treaty is supposed to enter force. Calls are now intensifying to include fossil fuel subsidies as a key part of the discussion.

"I think it is manifestly clear ... that this is a massive missing piece of the climate change jigsaw puzzle," said Tim Groser, New Zealand's minister for climate change.

He is spearheading an initiative backed by Scandinavian countries and some developing countries to put fuel subsidies on the agenda in various forums, citing the U.N. talks as a "natural home" for the debate.

The G-20 called for their elimination in 2009, and the issue also came up at the U.N. earth summit in Rio de Janeiro earlier this year. Frustrated that not much has happened since, European Union climate commissioner Connie Hedegaard said Monday she planned to raise the issue with environment ministers on the sidelines of the talks in Doha.

Many developing countries are positive toward phasing out fossil fuel subsidies, not just to protect the climate but to balance budgets. Subsidies introduced as a form of welfare benefit decades ago have become an increasing burden to many countries as oil prices soar.

"We are reviewing the subsidy periodically in the context of the total economy for Qatar," the tiny Persian gulf country's energy minister, Mohammed bin Saleh al-Sada, told reporters Monday.

Qatar's National Development Strategy 2011-2016 states it more bluntly, saying fuel subsides are "at odds with the aspirations" and sustainability objectives of the wealthy emirate.

The problem is that getting rid of them comes with a heavy political price.

When Jordan raised fuel prices last month, angry crowds poured into the streets, torching police cars, government offices and private banks in the most sustained protests to hit the country since the start of the Arab unrest. One person was killed and 75 others were injured in the violence.

Nigeria, Indonesia, India and Sudan have also seen violent protests this year as governments tried to bring fuel prices closer to market rates.

Iran has used a phased approach to lift fuel subsidies over the past several years, but its pump prices remain among the cheapest in the world.

"People perceive it as something that the government is taking away from them," said Kretzmann. "The trick is we need to do it in a way that doesn't harm the poor."

The International Energy Agency found in 2010 that fuel subsidies are not an effective measure against poverty because only 8 percent of such subsidies reached the bottom 20 percent of income earners.

The IEA, which only looked at consumption subsidies, this year said they "remain most prevalent in the Middle East and North Africa, where momentum toward their reform appears to have been lost."

In the U.S., environmental groups say fossil fuel subsidies include tax breaks, the foreign tax credit and the credit for production of nonconventional fuels.

Industry groups, like the Independent Petroleum Association of America, are against removing such support, saying that would harm smaller companies, rather than the big oil giants.

In Doha, Mohammed Adow, a climate activist with Christian Aid, called all fuel subsidies "reckless and dangerous," but described removing subsidies on the production side as "low-hanging fruit" for governments if they are serious about dealing with climate change.

"It's going to oil and coal companies that don't need it in the first place," he said.

___

Associated Press writers Abdullah Rebhy in Doha, Qatar, and Brian Murphy in Dubai, United Arab Emirates, contributed to this report

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Karl Ritter can be reached at www.twitter.com/karl_ritter

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Insiders Reveal 2012 Election Secrets

Pete Souza/White House

The 2012 election cycle came full circle last week when representatives from the Obama and Romney campaigns, as well as top advisers to many of the GOP primary candidates and several influential outside groups, gathered at the Harvard Kennedy School of Government for a 2012 debrief — finally answering some of the lingering questions about the race.

On neutral ground in Cambridge, Mass., fierce rivals (think Romney campaign manager Matt Rhoades and strategist Stuart Stevens and Obama campaign manager Jim Messina and strategist David Axelrod) met for the first time since the election — and many for the first time ever.

The conference, organized by Harvard’s Institute of Politics, featured a who’s who of political bold-faced names from campaign 2012, including senior campaign aides like Romney political director Rich Beeson and pollster Neil Newhouse, Obama deputy campaign manager Stephanie Cutter and digital director Teddy Goff, Rick Santorum adviser John Brabender, former Rick Perry campaign operatives Rob Johnson and Dave Carney and even Mark Block, who ran Herman Cain’s short-lived but much-talked-about presidential bid.

Representatives from the outside groups that had so much influence — and spent so much money — on the election were also on hand, including Bill Burton, senior strategist for the pro-Obama super PAC, Priorities USA Action; Steven Law, head of the pro-Republican group American Crossroads; and Tim Phillips, president of the conservative Americans for Prosperity.

Dozens of campaign 2012 veterans and journalists were on hand for the sessions, which covered the GOP primary, the general election, campaign strategy, the debates, conventions and the emerging power of the super PACS.

Here are some of the highlights from the conference:

Romney’s Campaign Concedes Immigration Position in Primary Was a Mistake

Mitt Romney’s decision to take a hard-line stance on immigration during the GOP primary was considered a big reason for his paltry 27 percent showing among Latino voters. But, the conventional wisdom has suggested that Romney couldn’t have won the primary without drawing a strong contrast with Texas Gov. Rick Perry on this hot-button issue.

Romney campaign manager Matt Rhodes, however, says that his candidate could have won the primary without attacking Perry’s support for in-state tuition for illegal immigrants.  When asked by panel moderator Jonathan Martin of Politico whether he “regret[s] trying to outflank Perry on the right on immigration,” Rhoades took a long pause, and then shifted the conversation to Perry’s controversial statements about Social Security. Romney had attacked the Texas governor for calling the popular entitlement program a “Ponzi scheme” and a “failure.”

“In retrospect,” Rhoades said. “I believe we probably could have just beaten Perry with the Social Security hit.”

So while Rhoades never said he wished that Romney had never uttered the words, “self-deportation” he essentially conceded that he regrets the immigration position the governor took in the primary.

The Obama Campaign Only Fully Committed to Florida in Mid-September

If there was one state that the Romney campaign felt confident they were going to win it was Florida. And, until mid-September, the Obama campaign wasn’t convinced that they were going to contest the state. That changed in the aftermath of the strong convention in Charlotte, however, and the Obama campaign decided that they were going to go “full out” to win there.

Obama campaign strategist David Axelrod:

“One of the things that we had discussed internally was the state of Florida and how we were going to treat Florida. We had made a decision that we were going to wait until mid September and after the conventions to see where we were in Florida before we fully committed. We were in, we had invested a lot, but we hadn’t been in the Miami media market. When we emerged from conventions not only had we gotten a little bump, but we saw Florida remained very competitive and made the decision to go full out in Florida.”

Team Romney Never Read Clint Eastwood Speech

Romney strategist and convention director Russ Schrieffer was asked by panel moderator Ron Brownstein of National Journal if anyone actually read a copy of Eastwood’s speech. The answer: not so much.

Russ Schrieffer: “I said [to Eastwood] are you going to do what we talked about, are you going to talk about what you talked about at these fundraisers. And he looked at me and said.. ‘Yep.’ ”

Laughter followed Schrieffer’s comments to which he replied:

“It’s Clint Eastwood, you argue with him.”

Republicans Are Worried (And Rightly So) About the Technology Gap With Democrats: 

Jon Huntsman’s campaign manager Matt David noted that “one area we should freak out about is technology. The GOP is far behind there.”

The Obama campaign used social media as a means to an end — using technology as a way to recruit, persuade, target and turn out voters.  Obama’s digital campaign guru Teddy Goff pointed to the power of Facebook in helping to find a previously unreachable group of potential voters: the friends of those who were already voting for the President.

In 2008, said Goff, they found that “99 percent of our email list voted.” As such, Goff said, “We entered into this election, with an understanding that anyone we were talking to directly, the vast majority were voting for us. So the question was … how can we serve them with stuff that will make them go out and get their friends.” And, Obama’s Facebook fans were a great place to start. Obama’s 33 million Facebook fans globally are friends with 98 percent of the U.S. Facebook population, Goff said.

Facebook also helped the campaign track down their coveted 18-to-29-year-old cohort. Goff explained that they were unable to reach half of their 18-to-29 GOTV targets by phone because they didn’t have a phone number for them. But, he said, they could reach 85 percent of that group via a Friend of Barack Obama on Facebook. “We had an ability to reach those people who simply otherwise couldn’t be reached,” Goff said.

Was the Romney High Command Really and Truly Shocked on Election Night? 

Neil Newhouse, Romney pollster:

“Here’s what we saw in the data: you have to give credit to the Obama campaign for undercutting it. We saw in the last two weeks, an intensity advantage, a campaign interest advantage, an enthusiasm advantage for Republicans and Mitt Romney. … Just the same as we saw four years ago on behalf of Barack Obama. We thought it would tilt the partisan make-up of the electorate a couple points in our direction.

“We weren’t surprised by racial composition; we were surprised by the partisan composition. … The real hidden story here on our side, the number of white men who didn’t vote in this election compared to four years ago was extraordinary. And these white men were replaced by white women. We were taking a group we won by 27 points and replacing them with a group we won by 12-14 points.”

Perry Should Have Waited Until Late Fall, Not Summer, to Jump In:

Perry strategist Dave Carney said the biggest tactical mistake made by Perry was that “we should have started years ago.” Perry, as governor in a state with a part-time legislature, “had a lot of time on his hands” — he should have used that time, and his role as RGA chair, to meet donors and travel the country before 2011. Once Perry decided to get in, however, Carney argues the Perry should have waited until mid-October or November to get into the race. That extra few months, said Carney, “would have given us more time to be prepared and do the groundwork that was necessary on the issues.”

What Role Did Karl Rove Play With Republican Outside Groups Like American Crossroads, Which He Co-founded?

Steven Law, president and CEO of American Crossroads and president CrossroadsGPS:

“Karl … recognized it was really important to not simply have an organization exist in a particular cycle for a tactical use but to … start to build enduring institutional strength on the right the way that we saw the unions providing that for the Democrats. … And then there were certain other parts that I think Karl really gets credit for. The first is encouraging us to reach out to other center-right groups and to try to start to collaborate where we were legally permitted to do so to share information and encourage people to pull the oars in the same direction. On the fundraising side both he and Ed [Gillespie] and then later on Haley Barbour were all tremendously instrumental in harvesting their Rolodexes and relationships. Karl is a guy that’s got tremendously good ideas, and again, not so much on the tactical side but more kind of broad strategic moments and was a tremendously useful and valuable source of ideas along the way.”

Bill Burton, senior adviser, Priorities USA Action:

“He also helped us raise money. I probably e-mailed out every one of his columns to our donors — our high-dollar list — to point out what they were saying on the Republican side and how confident Rove was. … When he would go on TV bursting with confidence about Romney winning, that little click went around every single time. Karl Rove is an enduring figure for both sides.”

After Rove’s Appearance on Fox News on Election Night, Is He Discredited Within the Republican Party?

Steven Law:

“Absolutely not. We all get our turn in the barrel.”

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Netanyahu brushes off world condemnation of settlement plans

JERUSALEM (Reuters) - Prime Minister Benjamin Netanyahu on Sunday brushed off world condemnation of Israel's plans to expand Jewish settlements after the Palestinians won de facto U.N. recognition of statehood.

"We will carry on building in Jerusalem and in all the places that are on the map of Israel's strategic interests," a defiant Netanyahu said at the weekly cabinet meeting.

In another blow to the Palestinian Authority in the West Bank, Israel announced it was withholding Palestinian tax revenues this month worth about $100 million.

Israel said the reason for the move was a Palestinian debt of $200 million to the Israeli Electric Corporation, an obligation that has existed for some time.

Finance Minister Yuval Steinitz cautioned last month that if the Palestinians went ahead with the U.N. bid Israel would "not collect taxes for them and we will not transfer their revenues".

Yasser Abed Rabbo, a senior Palestinian official, said confiscation of the tax funds due the cash-strapped Authority, vital to meeting its payroll, was "piracy and theft".

Stung by the U.N. General Assembly's upgrading of the Palestinians' status from "observer entity" to "non-member state", Israel said on Friday it would build 3,000 more settler homes in the West Bank and East Jerusalem, areas Palestinians want for a future state, along with Gaza.

An Israeli official said the government also ordered "preliminary zoning and planning work" for thousands of housing units in areas including the so-called "E1" zone near Jerusalem.

Such construction could divide the West Bank in two and further dim Palestinian hopes, backed by the United States and other international sponsors of the Middle East peace process, for a contiguous country.

"It would represent an almost fatal blow to remaining chances of securing a two-state solution," United Nations Secretary-General Ban Ki-moon said in a statement on Sunday.

Israeli officials said it could be up to two years before any building begins in E1.

At the cabinet meeting, Netanyahu said the "unilateral step the Palestinians took at the U.N. is a gross violation of previous agreements signed with Israel". The government of Israel, he added, "rejects the General Assembly's vote".

The upgrade, approved overwhelmingly, fell short of full U.N. membership, which only the Security Council can grant. But it has significant legal implications because it could allow the Palestinians access to the International Criminal Court where they could file complaints against Israel.

Israel's settlement plans, widely seen as retaliation for the Palestinians' U.N. bid, have drawn strong international condemnation from the United States, France, Britain and the European Union.

"The recognition of Palestine as a state changes a lot of the facts, and aims to establish new ones," Palestinian President Mahmoud Abbas told a cheering crowd in the West Bank city of Ramallah on his return from the United States.

"But we have to recognize that our victory provoked the powers of settlement, war and occupation."

INTERNATIONAL CRITICISM

Netanyahu heads a pro-settler government and opinion polls predict his Likud party will come out on top in Israel's January 22 parliamentary election, despite opponents' allegations that his policies have deepened Israeli diplomatic isolation.

"All settlement construction is illegal under international law and constitutes an obstacle to peace," the EU's foreign policy chief Catherine Ashton said in a statement on Sunday.

The United States said the plan was counterproductive to any resumption of direct peace talks, stalled for two years in a dispute over settlement expansion in the West Bank and East Jerusalem, both captured by Israel in a 1967 war.

Netanyahu says Israel, as a Jewish state, has a historic claim to land in the West Bank and to all of Jerusalem. Palestinians want East Jerusalem as the capital of a future state. Israel considers all of the holy city as its capital, a claim that is not recognized internationally.

Israeli Housing Minister Ariel Attias said that within weeks the government would publish invitations for bids from contractors to build 1,000 homes in East Jerusalem and more than 1,000 in West Bank settlement blocs.

"E1 is in planning, which means sketches on paper," Attias told Army Radio. "No one will build until it is clear what will be done there."

The E1 zone is considered especially sensitive. Israel froze much of its activities in E1 under pressure from former U.S. President George W. Bush and the area has been under the scrutiny of his successor Barack Obama.

Benny Kashriel, mayor of the Maale Adumim settlement adjacent to E1, told Army Radio building "will take a year or two".

Yariv Oppenheimer, head of the Israeli anti-settlement group Peace Now said: "If we build in E1 the two-state vision will truly be history ... it is a strategic point that if built, will prevent the Palestinians from having a normal state."

Approximately 500,000 Israelis and 2.5 million Palestinians live in the West Bank and East Jerusalem.

(Additional reporting by Jihan Abdalla and Ali Sawafta in Ramallah and Louis Charbonneau in New York; Editing by Jeffrey Heller and Andrew Roche)

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Netball: Singapore pick up second victory in Nations Cup

SINGAPORE: Singapore picked up its second victory at the Netball Nations Cup on Monday.

The hosts defeated the Republic of Ireland 54-34 at the Toa Payoh Sports Hall.

Singapore narrowly beat Malaysia 44-42 on Sunday.

But it was an easier task against the Republic of Ireland, the lowest ranked team in the six-nation tournament.

The Singapore girls took control early and led all the way.

The hosts even used the game to try out new player combinations.

Ireland tried but succumbed, suffering their second defeat in as many games.

In their next match, Singapore will meet a tougher Namibia as the Africans are looking good and determined.

In an earlier match on Monday, Namibia put up a strong fight against higher-ranked Sri Lanka before losing 65-69.

In another match, Malaysia suffered their second defeat in a row, losing to Tanzania 36-61.

- CNA/de

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Cauvery water issue: Tamil Nadu says centre soft on Karnataka

NEW DELHI: Since Karnataka is heading for assembly elections in 2013, the central government may not be pushing it hard to release Cauvery water for Tamil Nadu, the Supreme Court was told by a counsel on Monday.

"Karnataka elections are there. No direction will be given (to Karnataka to release water to Tamil Nadu)," Tamil Nadu's senior counsel CS Vaidyanathan told the apex court bench of Justice DK Jain and Justice Madan B Lokur.

The court is hearing a batch of petitions and application filed by Karnataka and Tamil Nadu on the release of 9,000 cusecs of water daily from Cauvery for the latter.

The Cauvery River Authority (CRA) headed by the prime minister in an interim award Sep 19 directed Karnataka to release for Tamil Nadu 9,000 cusecs of Cauvery water every day.

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Asperger's dropped from revised diagnosis manual

CHICAGO (AP) — The now familiar term "Asperger's disorder" is being dropped. And abnormally bad and frequent temper tantrums will be given a scientific-sounding diagnosis called DMDD. But "dyslexia" and other learning disorders remain.

The revisions come in the first major rewrite in nearly 20 years of the diagnostic guide used by the nation's psychiatrists. Changes were approved Saturday.

Full details of all the revisions will come next May when the American Psychiatric Association's new diagnostic manual is published, but the impact will be huge, affecting millions of children and adults worldwide. The manual also is important for the insurance industry in deciding what treatment to pay for, and it helps schools decide how to allot special education.

This diagnostic guide "defines what constellations of symptoms" doctors recognize as mental disorders, said Dr. Mark Olfson, a Columbia University psychiatry professor. More important, he said, it "shapes who will receive what treatment. Even seemingly subtle changes to the criteria can have substantial effects on patterns of care."

Olfson was not involved in the revision process. The changes were approved Saturday in suburban Washington, D.C., by the psychiatric association's board of trustees.

The aim is not to expand the number of people diagnosed with mental illness, but to ensure that affected children and adults are more accurately diagnosed so they can get the most appropriate treatment, said Dr. David Kupfer. He chaired the task force in charge of revising the manual and is a psychiatry professor at the University of Pittsburgh.

One of the most hotly argued changes was how to define the various ranges of autism. Some advocates opposed the idea of dropping the specific diagnosis for Asperger's disorder. People with that disorder often have high intelligence and vast knowledge on narrow subjects but lack social skills. Some who have the condition embrace their quirkiness and vow to continue to use the label.

And some Asperger's families opposed any change, fearing their kids would lose a diagnosis and no longer be eligible for special services.

But the revision will not affect their education services, experts say.

The new manual adds the term "autism spectrum disorder," which already is used by many experts in the field. Asperger's disorder will be dropped and incorporated under that umbrella diagnosis. The new category will include kids with severe autism, who often don't talk or interact, as well as those with milder forms.

Kelli Gibson of Battle Creek, Mich., who has four sons with various forms of autism, said Saturday she welcomes the change. Her boys all had different labels in the old diagnostic manual, including a 14-year-old with Asperger's.

"To give it separate names never made sense to me," Gibson said. "To me, my children all had autism."

Three of her boys receive special education services in public school; the fourth is enrolled in a school for disabled children. The new autism diagnosis won't affect those services, Gibson said. She also has a 3-year-old daughter without autism.

People with dyslexia also were closely watching for the new updated doctors' guide. Many with the reading disorder did not want their diagnosis to be dropped. And it won't be. Instead, the new manual will have a broader learning disorder category to cover several conditions including dyslexia, which causes difficulty understanding letters and recognizing written words.

The trustees on Saturday made the final decision on what proposals made the cut; recommendations came from experts in several work groups assigned to evaluate different mental illnesses.

The revised guidebook "represents a significant step forward for the field. It will improve our ability to accurately diagnose psychiatric disorders," Dr. David Fassler, the group's treasurer and a University of Vermont psychiatry professor, said after the vote.

The shorthand name for the new edition, the organization's fifth revision of the Diagnostic and Statistical Manual, is DSM-5. Group leaders said specifics won't be disclosed until the manual is published but they confirmed some changes. A 2000 edition of the manual made minor changes but the last major edition was published in 1994.

Olfson said the manual "seeks to capture the current state of knowledge of psychiatric disorders. Since 2000 ... there have been important advances in our understanding of the nature of psychiatric disorders."

Catherine Lord, an autism expert at Weill Cornell Medical College in New York who was on the psychiatric group's autism task force, said anyone who met criteria for Asperger's in the old manual would be included in the new diagnosis.

One reason for the change is that some states and school systems don't provide services for children and adults with Asperger's, or provide fewer services than those given an autism diagnosis, she said.

Autism researcher Geraldine Dawson, chief science officer for the advocacy group Autism Speaks, said small studies have suggested the new criteria will be effective. But she said it will be crucial to monitor so that children don't lose services.

Other changes include:

—A new diagnosis for severe recurrent temper tantrums — disruptive mood dysregulation disorder. Critics say it will medicalize kids' who have normal tantrums. Supporters say it will address concerns about too many kids being misdiagnosed with bipolar disorder and treated with powerful psychiatric drugs. Bipolar disorder involves sharp mood swings and affected children are sometimes very irritable or have explosive tantrums.

—Eliminating the term "gender identity disorder." It has been used for children or adults who strongly believe that they were born the wrong gender. But many activists believe the condition isn't a disorder and say calling it one is stigmatizing. The term would be replaced with "gender dysphoria," which means emotional distress over one's gender. Supporters equated the change with removing homosexuality as a mental illness in the diagnostic manual, which happened decades ago.

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AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner .

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Will Mortgage Deduction Survive Fiscal Cliff?

When politicians talk about closing tax loopholes, it seems like they're targeting greedy corporations. But they're also talking about Jaclyn Picarillo, 33, mom of two and American homeowner.

The home mortgage interest tax deduction is one of the biggest tax breaks available and it allows individuals to deduct the interest they pay to their mortgage company.

It has encouraged millions of Americans to become homeowners. But as lawmakers search for ways to control federal spending, reform the tax code and avoid the "fiscal cliff," there's a good chance they'll take a look at the mortgage deduction. It's worth more than $100 billion each year. All or part of that money could go a long way to finding the $1.6 trillion in additional tax revenue President Obama wants negotiators in Washington to agree to.

Picarillo, who lives with her husband, a three-year-old and a 15-month-old in Fairfield, Ct., a New York City suburb with both high housing costs and a high cost of living, bought her first home last year after previously renting. Picarillo and her husband decided to buy because they knew they were getting the tax break, and they used that money to renovate the home as well as make a down payment on a new car Picarillo needed.

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The mortgage deduction has been fiercely guarded until now, although it costs the government over $100 billion a year by most estimates, because of the sentimental attachment to it and the idea that it helps middle class families afford homes. While those who benefit from the deduction, including homeowners and people in the real estate industry, are passionate about keeping the deduction in place, others say it should be eliminated because it overwhelmingly helps the wealthy and those who can afford to buy a home already.

"By getting rid of the [home mortgage interest tax deduction], I'm more likely to hold on to my car longer and less likely to hire a builder to improve the house," Picarillo said. "Why would you become a homeowner without it? There are so many worries with owning a home, many people might think it's easier to rent."

If Picarillo sounds savvy about the deduction, it's because she is. She is also in the real estate industry, working with her mother to sell homes in Fairfield County, which includes Westport, Ct., where some of the country's most expensive homes are located.

She says that many of her customers are "on the fence" about buying in a market that has been struggling the last few years.

Picarillo describes her family as "definitely middle class" and says without the deduction she will have to "work a lot harder" to maintain the lifestyle she currently has.

The deduction, which has been around in some form or another since 1913, overwhelmingly helps people in areas like the Northeast and metro areas with high home prices. Edward Kleinbard, the former chief of staff to the U.S. Congress's Joint Committee on Taxation, says it should be up for elimination or reduction because it just doesn't help the majority of Americans.

"The bottom 80 percent of America, which includes the middle class, is only getting 20 percent of the tax benefit," Kleinbard, who is also a professor at the University of Southern California Gould School of Law, explained. "That's a very top-weighted distribution and it doesn't apply to the middle class because by definition the middle class is the 50 percent."

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Islamist protest shuts down Egypt's top court

CAIRO (Reuters) - Protests by Islamists allied to President Mohamed Mursi forced Egypt's highest court to adjourn its work indefinitely on Sunday, intensifying a conflict between some of the country's top judges and the head of state.

The Supreme Constitutional Court said it would not convene until its judges could operate without "psychological and material pressure", saying protesters had stopped the judges from reaching the building.

Several hundred Mursi supporters had protested outside the court through the night ahead of a session expected to examine the legality of parliament's upper house and the assembly that drafted a new constitution, both of them Islamist-controlled.

The cases have cast a legal shadow over Mursi's efforts to chart a way out of a crisis ignited by a November 22 decree that temporarily expanded his powers and led to nationwide protests.

The court's decision to suspend its activities appeared unlikely to have any immediate impact on Mursi's drive to get the new constitution passed in a national referendum on December 15.

Three people have been killed and hundreds wounded in protests and counter-demonstrations over Mursi's decree.

At least 200,000 of Mursi's supporters attended a rally at Cairo University on Saturday. His opponents are staging an open-ended sit-in in Cairo's Tahrir Square, the cradle of the uprising that toppled Hosni Mubarak in February 2011.

Mursi and the Muslim Brotherhood, which propelled him to power in a June election, hope to end the crisis by pushing through the new constitution hastily adopted by the drafting assembly on Friday. The next day the assembly handed the text to Mursi, who called the referendum and urged Egyptians to vote.

"The Muslim Brotherhood is determined to go ahead with its own plans regardless of everybody else. There is no compromise on the horizon," said Hassan Nafaa, a professor of political science at Cairo University.

Outside the Supreme Constitutional Court, Muslim Brotherhood supporters rallied behind the referendum date. "Yes to the constitution", declared a banner held aloft by one protester. Chants demanded the "purging of the judiciary".

The interior minister told the head of the court that the building was accessible and the protests were peaceful, according a statement from the ministry.

The protest reflected the deep suspicion harbored by Egypt's Islamists towards a court they see as a vestige of the Mubarak era. The same court ruled in June to dissolve the Muslim Brotherhood-led lower house of parliament.

Since then, several legal cases have challenged the legitimacy of the upper house of parliament and the 100-member constituent assembly that wrote the constitution.

Those against the upper house have focused on the legality of the law by which it was elected, while the constitutional assembly has faced a raft of court cases alleging that the way it was picked was illegal.

STOCK MARKET RALLIES

Mursi believes that securing approval for the new constitution in a popular referendum will bury all arguments on the legality of the constituent assembly, as well as controversy over the text it worked through the night to finish on Friday.

It will also override the November 22 decree that prompted statements of concern from Western governments and a rebellion by sections of the judiciary that saw it as a threat to their role. The decree shielded Mursi from judicial oversight.

Judges supervise voting in Egypt, so Mursi now needs them to oversee the referendum. Vice President Mahmoud Mekky said on Sunday he was confident the judges would perform that role, though Mursi's critics in the judiciary may call for a boycott.

While the Islamists' critics, including representatives of the Christian minority, have accused the Brotherhood of trying to hijack the constitution, investors appear to have seen Mursi's moves as a harbinger of stability. They were also relieved that Saturday's mass Islamist protest went off calmly.

The main stock market index, which lost a tenth of its value in response to Mursi's November 22 decree, rallied more than 2 percent when the market opened on Sunday.

"The events that took place through the weekend, from the approval of the final draft of the constitution and the president calling a referendum, gave some confidence to investors that political stability is on track," said Mohamed Radwan of Pharos Securities, an Egyptian brokerage.

But the political opposition, made up of leftist, liberal and socialist parties, have been infuriated by what they see as the Brotherhood's attempt to ram through a constitution that does not enjoy national consensus.

Mursi's opponents warn of deeper polarization ahead.

"LET EVERYONE HAVE THEIR SAY"

Leading opposition figure Mohamed ElBaradei said on Twitter that the "struggle will continue" over a draft constitution that "undermines basic freedoms".

Liberal figures, including former Arab League chief Amr Moussa, pulled out of the constituent assembly last month, as did Christian representatives.

The draft constitution contains Islamist-flavored language which opponents say could be used to whittle away human rights and stifle criticism. It forbids blasphemy and "insults to any person", does not explicitly uphold women's rights and demands respect for "religion, traditions and family values".

The New York-based Human Rights Watch said it protected some rights while undermining others.

The text limits presidents to two four-year terms, requires parliamentary approval for their choice of prime minister, and introduces some civilian oversight of the military - although not enough for critics. Mubarak ruled for three decades.

Mursi described it as a constitution that fulfilled the goals of the January 25, 2011 revolution that ended Mubarak's rule. "Let everyone - those who agree and those who disagree - go to the referendum to have their say," he said.

The Islamists are gambling that they will be able to secure a "yes" vote by mobilizing their core support base and many other Egyptians keen for an end to two years of turmoil that has taken a heavy toll on the economy.

Nafaa of Cairo University said the constitution would likely be approved by a slim majority. "But in this case, how can you run a country with a disputed constitution - a constitution not adopted by consensus?" he asked.

(Writing by Tom Perry; Editing by Alistair Lyon)

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Starbucks to review British tax arrangements

LONDON: Global coffee giant Starbucks said Sunday it was reviewing its tax affairs in Britain after it took a roasting from lawmakers and campaigners who accuse the chain of paying too little.

The Seattle-based firm admitted that "we need to do more" although it would not confirm a report in Britain's Sunday Times newspaper that it will promise this week to increase the amount of corporation tax it pays.

"We have listened to feedback from our customers and employees, and understand that to maintain and further build public trust we need to do more," Starbucks said in a statement.

"As part of this we are looking at our tax approach in the UK. The company has been in discussions with HMRC (Her Majesty's Revenue and Customs) for some time and is also in talks with the Treasury (finance ministry).

"We will release more details later in the week."

Starbucks had previously confirmed that it did not pay any corporation taxes in Britain for the past three years on sales worth £400 million ($640 million, 493 million euros).

It was able to do so by paying fees to other areas of its business -- such as "royalty payments" for the use of the brand -- which resulted in the company posting a series of losses and not having to pay any corporation tax.

The Sunday Times said that since coming to Britain in 1998 the chain has paid just £8.6 million in corporation tax despite generating £3 billion in revenue.

The spokesman added: "Starbucks is committed to the UK for the long term and we have invested more than £200 million in our UK business over the past 12 years.

"Starbucks has complied with all the tax laws in this country but has regretfully not been as profitable as we would have liked."

The Public Accounts Committee -- a panel of British lawmakers -- is due to release a report this week which is expected to criticise the measures used by corporations to avoid paying tax as the rest of the country grapples with tough austerity measures.

The committee quizzed senior figures from Starbucks, US online retailer Amazon and Internet search giant Google.

During the hearing Margaret Hodge, a Labour party lawmaker who chairs the committee, said Starbucks' claim that its British division was unprofitable "just doesn't ring true".

Starbucks has faced calls by activist groups for a consumer boycott in recent weeks.

- AFP/ck

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