GOP divided over using budget process on health care law

WASHINGTON — Republicans running Congress have promised to use every weapon in their arsenal to take down President Barack Obama's health care law.

But now some are questioning whether to use the congressional budget process to derail the 2010 law or save the special step for more traditional purposes like cutting spending or overhauling the tax code. A potentially divisive debate between tea party forces and GOP pragmatists looms.

At issue is an arcane process known as budget reconciliation. It's the only filibuster-proof option available to Republicans, who control the Senate with 54 seats but must still muster 60 votes to pass other legislation.

Senate precedents limit the number of reconciliation bills — one for taxes, one for spending and one to raise the government's borrowing cap — and so a major debate has begun among Republicans over what to put in it.

Hard-line conservatives want to use the process to force a showdown with Obama over the law.

Sen. Ted Cruz, R-Texas, told a Heritage Foundation gathering of conservatives last week that Republicans should "use every procedural tool available, including reconciliation, to repeal Obamacare with 51 votes in the Senate."

That's a view shared by conservative groups like the Senate Conservatives Fund and Heritage Action, and prominent voices on the right like Erick Erickson, publisher of the Redstate.com conservative blog.

"It's time to stop pussy-footing around with excuses and half-assed attempts at partial repeal, and get serious," Erickson wrote last week. "Make Obama veto the repeal of his signature legislation."

Pragmatic voices in the GOP, however, say the certainty of an Obama veto effectively means that Republicans would be wasting the opportunity given them under special budget rules that limit debate and can guarantee delivery of legislation to Obama.

"I'd like to get tax reform done. I think we could do infrastructure in that process. And I think that's something that could actually get enacted," said Sen. John Thune, R-S.D., chairman of the Senate Commerce committee. "I mean we're going to have a lot of Obamacare votes one way or the other."

A reconciliation measure can only advance after the House and Senate have agreed upon a measure called a budget resolution, which sets broad parameters for spending, revenues and curbs to benefit programs such as Medicare and Medicaid.

Democrats used reconciliation to help pass Obama's health care plan. And Bill Clinton and Republicans controlling Congress used it in 1997 to advance a balanced budget bill. Republicans, led by Newt Gingrich in 1995, tried to use it to pass a bitterly partisan 1995 balanced budget plan Clinton vetoed. Even though their budget resolution is likely to project a balanced federal ledger over the coming 10 years, Republicans are signaling they're not willing to do a party-line replay of their 1995 experience.

"The only way to do entitlement eligibility changes is on a bipartisan basis," Senate Majority Leader Mitch McConnell, R-Ky., said Thursday at a news conference at a GOP issues retreat in Hershey, Pa. "We do not intend to be offering unilateral, one party-only entitlement eligibility changes."

Republicans devoted a session at the retreat to the topic of reconciliation. A decision on what to do with it appears a ways off.

"At some point we'll decide if we're going to have reconciliation and if we do, we'll make some decision much later on," House Speaker John Boehner told reporters last week.

The view of some pragmatists is that reconciliation should be used to get a result that might get signed into law or as leverage to make Obama more uncomfortable than he would be in vetoing an Obamacare repeal measure. And some lawmakers think that an upcoming Supreme Court ruling could unravel much of the law, making them wary of wasting reconciliation on the health care law.

"It should be things like that that actually improve the long-term fiscal stability of the country and maybe provide us some revenues for things where we can agree, like infrastructure," said Rep. Tom Cole, R-Okla.

A telling episode last fall illustrates the passion over the issue.

McConnell told Fox News that repealing Obama's health care plan would "take 60 votes in the Senate .... and it would take a presidential signature." This sparked a mini-eruption on the right that prompted McConnell's office to release a statement promising to use budget reconciliation to repeal the law.

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EU won't ease Russia sanctions as Ukraine conflict rages

BRUSSELS — The European Union foreign ministers are ruling out any immediate easing of sanctions against Russia as fighting rages in eastern Ukraine, despite concerns about the economic consequences.

Dutch Foreign Minister Bert Koenders said Monday that since the fighting around the Donetsk airport in eastern Ukraine had intensified, "this is no time to talk about the easing of sanctions."

Lithuanian Foreign Minister Linas Antanas Linkevicius said Russia has shown "no political will, no movement on the ground, so no reason to change policy."

In Paris, French President Francois Hollande expressed concerns about the economic consequences of the sanctions for the European economy.

He stressed that French food producers have been especially affected by the sanctions, and said European officials "must make efforts" to address these issues.

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Snowplow tracking apps hold cities accountable for cleanup

CHICAGO — As another storm flung snow at Chicago, Alexandra Clark wondered how she'd get to work. Like an increasing number of snowbound city dwellers, she had a ready tool at hand: an app that tracks hundreds of city snowplows in close to real time.

But something seemed out of whack.

"Plow tracker said my street was plowed an hour ago - Pull the other leg," the 31-year-old video producer tweeted to the mayor's office, including a photo of her snowed-in street.

Across the country, local leaders have made plow-tracking data public in free mobile apps, turning citizens into snow watchdogs and giving them a place to look for answers instead of clogging phone lines at city call centers to fume. Chicago and New York introduced apps in early 2012, and Seattle has gotten into the game, as have some places in Maryland and Virginia.

Boston briefly experimented, too, though their site was so popular it crashed during a February 2013 storm, hampering the response effort. The city hasn't made another attempt.

The apps tap into GPS data already collected by the city to direct plows, so no extra money is spent in the creation. It's a politically deft move by cities where bungled storm responses have cost officials their jobs, and a way to show skeptics that plow drivers are working hard — and not just clearing the streets of the wealthy and well-connected.

But in New York and Chicago, in particular, the tech savvy have scrutinized the sites. Armed with the ultimate proof — the cities' own data — they've needled public officials about snow-cleanup shortfalls on social media.

"It puts a lot of pressure on everybody involved to be more responsible and to be more accountable," said Priscilla Dixon, a Chicago lawyer who has used the app and is a believer in engaging the city via social media.

Clark remembers peering out the window of her Wicker Park apartment on the city's West Side in a January 2014 storm. A pair of heavy truck tire tracks suggested a GPS-equipped plow might indeed have passed, but with the blade up.

"No joke, the next week when it snowed overnight, a plow had come through and taken off the side mirror of my car," the Redondo Beach, California-native recalled with a laugh. "It's probably coincidence but after that I really didn't tweet much to the City of Chicago anymore."

Mayors in Chicago and other cities where snow is frozen into local lore know that storms can doom political careers. A botched response to a 1979 blizzard in Chicago is said to have cost then-Mayor Michael Bilandic re-election.

More recently, a 2011 blizzard entombed cars and buses and stranded hundreds of people for 12 hours overnight on Chicago's Lake Shore Drive, and a December 2010 blizzard did much the same in New York City. Those debacles prompted both cities to create plow trackers. Then-Mayor Michael Bloomberg talked of wanting to fix the disconnect between what NYC officials were saying and what people were seeing.

In the lead-up to one of the first storms this year, Chicago Mayor Rahm Emanuel exuded confidence.

"We're going to bring all of the assets and strengths of the city to bear to make sure that people are safe, secure and that our streets are safe, plowed and passible," he told reporters on Jan. 5.

The app drew more than 2,500 visitors in the hours that followed, Department of Streets and Sanitation spokeswoman Molly Poppe said.

The city is not bothered by the extra scrutiny, says Poppe, who engages residents via the department's Twitter account. A typical exchange involves her explaining that blowing snow can make a freshly plowed street look like it's been skipped.

Last February, residents in the Albany Park neighborhood on Chicago's Northwest Side contended their block had not been cleared all season, forcing them to attack the street themselves with shovels and snowblowers.

The app seemed to back them up, but Poppe pointed out that narrow streets require smaller plows, which last year were not feeding tracking data. In any case, the story appeared on a local TV newscast, and the next day, the snow was gone.

Web developer Derek Eder has crunched three years' worth of plow data with his own app, ClearStreets, and is convinced Chicago generally deploys plows fairly throughout the city. But that hasn't dispelled all suspicion to the contrary.

"If you're an alderman or mayor, you're going to get your streets plowed first," said insurance lawyer Tom Manning, who lives in Bloomington, Illinois, but has checked the app before two-hour drives to Chicago. "That's just the way it's been for many, many years."

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Years before Sony hack, NSA had cracked into North Korean networks: report

U.S. officials have been confident in pinning the blame on North Korea for last fall's devastating cyber-attack on Sony Pictures Entertainment because the National Security Agency had been closely monitoring the communist country's computer systems for several years, according to a New York Times report.

As far back as 2010, the NSA broke into Chinese networks that connect North Korea to the Internet and placed software on systems to track many of North Korea's army of cyber-attackers, which South Korea has said amounts to about 6,000 individuals, the Times reported, citing unnamed officials.

Using evidence gathered from that program, which originally focused on the North's nuclear program, U.S. intelligence officials were able to convince President Obama that the North Koreans were in fact responsible for the attack on Sony. As a result, the White House earlier this month issued new sanctions against the country.

Some information-security experts have questioned the U.S.'s claims that North Korea was responsible for the Sony attack. At least one firm claimed it found evidence pointing to a former SPE employee with the technical background and knowledge to help carry out the attack.

But if NSA officials were monitoring North Korea closely, the question is why they didn't detect the looming attack on Sony, which took more than two months of careful planning, according to the Times. The reason is that the initial attacks did not look suspicious, according to the report, with investigators only later discovering that North Korean hackers had stolen a Sony systems administrator's log-in credentials to gain access to the studio's systems.

According to U.S. officials, North Korea launched the cyber-attack on Sony in retaliation for the studio's film "The Interview," a comedy starring James Franco and Seth Rogen in which two American journalists carry out the assassination of North Korean leader Kim Jong-un.

© 2015 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC

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China shares dive as regulators clamp down on margin trading

TOKYO — Chinese shares plunged about 8 percent Monday after the country's securities regulator imposed margin trading curbs on several major brokerages, a sign authorities are worried about the market's big gains. Other markets in Asia and Europe were mostly higher.

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KEEPING SCORE: In Europe, Germany's DAX rose 0.46 percent to 10,214.31, and France's CAC-40 edged 0.3 percent higher to 4,394.32. Britain's FTSE 100 added 0.15 percent to 6,559.93. Wall Street is closed for a public holiday. The Shanghai Composite Index dived 7.7 percent to close at 3,116.35, giving investors a wild ride after a year of surging prices despite slowing economic growth; at its nadir, the index was down 8.3 percent. For the past three months, the index is still up 32 percent. Its dive rubbed off on Hong Kong where the Hang Seng was off 1.5 percent at 23,738.49.

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CHINA CURBS: The China Securities Regulatory Commission imposed curbs late Friday on margin financing, or borrowing to purchase stocks, following an investigation of the industry. The three affected brokerages, Citic Securities Co., Haitong Securities Co. and Guotai Junan, were forbidden to lend money and shares to new customers for three months after they allegedly were caught extending margin trading contracts in violation of the rules. The Shanghai Composite has soared almost 60 percent in the past year. Investors fear regulators believe prices have risen too much recently and might impose more curbs.

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THE QUOTE: Dickie Wong, executive director of research at Kingston Securities in Hong Kong, said regulators want to tamp down some of the riskier financing practices underpinning the mainland Chinese stock market's astonishing surge. With the rally "overdone," regulators want to "simply give pause" to the brokerages, he said. "The recent bull market is mainly driven by margin financing." Mainland Chinese regulators allowed margin financing and short selling only in recent years and Wong said many mainland investors may still be unaware of the risks involved.

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MORE CHINA, ECB: Investors are awaiting China's economic growth data due Tuesday, which is likely to show a further slowdown in the fourth quarter, and are also anticipating possible stimulus moves by the European Central Bank. Markets generally settled down after volatility provoked by the Swiss central bank's shock decision Thursday to untether the Swiss franc from the euro. Japan's central bank is not expected to make any major moves in a policy meeting that wraps up Wednesday.

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ASIA SCORECARD: Japan's Nikkei 225 rose 0.9 percent to 17,014.29 after a government report showed rising consumer confidence. South Korea's Kospi gained 0.8 percent to 1,902.62. Australia's S&P/ASX 200 rose 0.2 percent to 5,309.10. Shares were also higher in Taiwan, New Zealand and Southeast Asia.

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ENERGY: Benchmark U.S. crude was down 51 cents at $48.18 a barrel on the New York Mercantile Exchange just before midday in Europe. The contract jumped $2.44 on Friday to settle at $48.69. Brent crude, a benchmark for international oils, fell 36 cents to $49.81 a barrel in London.

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CURRENCIES: The euro rose to $1.1598 at midday in Europe from $1.1561 late Friday. The dollar dropped to 117.40 yen from 117.57 yen.

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AP Business Writer Kelvin Chan in Hong Kong contributed to this report.

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Justices weigh would-be judges' appeals for campaign cash

WASHINGTON — Voters in the Tampa area didn't think much of Lanell Williams-Yulee's campaign for county judge in 2010, and the group that regulates Florida's lawyers didn't much like her campaign tactics.

Along with being drubbed in the election, she was hauled before the Florida Bar for violating its ban on personally soliciting campaign contributions by sending a "Dear Friend" letter asking for money.

Five years after the Supreme Court freed corporations and labor unions to spend freely in federal elections, the justices will hear arguments Tuesday in Williams-Yulee's challenge to the Florida rules, which she says violate her right to speak freely. The state bar, defending the ban on personal fundraising, says it's more important to preserve public confidence in an impartial judiciary.

In 39 states, state and local judges get their jobs by being elected. Florida is among the 30 of those that prohibit candidates from personally asking for campaign contributions. If Williams-Yulee prevails, it could free judicial candidates in those states to make personal appeals for campaign cash. In the federal judicial system, including the Supreme Court, judges are appointed to life terms and must be confirmed by the Senate.

Supporters of the solicitation ban point to a dramatic increase in money raised and spent on judicial campaigns. In state Supreme Court races alone, $207 million was spent between 2000 and 2009, up from $83 million in the preceding decade, according to a study by several groups concerned about money in politics. Polls also have shown that the public thinks campaign contributions make a difference in the outcome of cases.

The Supreme Court has generally been skeptical of limits on political campaigns, though slightly less so when it comes to those involving judges.

In 2002, the court struck down rules aimed at fostering impartiality among judges that barred candidates for elected judgeships from speaking out on controversial issues. But in 2009, the court held in a case from West Virginia that elected judges could be forced to step aside from ruling on cases when large campaign contributions from interested parties create the appearance of bias.

Lower courts have been split on the issue in the Florida case.

Yulee-Williams' transgression was signing and sending a generic, mass-mailed letter asking for up to $500 in campaign contributions. She also posted it on her website. She would have avoided legal trouble had the letter been signed by anyone else. And nothing prevents a candidate from learning who did or did not give, or writing personal thank-you notes to contributors.

She received a public reprimand and had to pay $1,860 in legal costs, a penalty that the Florida Supreme Court upheld.

Williams-Yulee argued in court papers that states that worry about bias among judges should focus on rules that force judges to recuse themselves in cases where they may have a conflict or limits on the size of campaign contributions. The American Civil Liberties Union is supporting her.

On the other side, the state bar and interest groups that lament the rising influence of money in judicial elections say the restriction at issue in Florida and the other states is reasonable.

Former elected chief justices in Alabama and Texas — which permit candidates for judgeships to ask for campaign funds — called on the court to uphold the prohibition and said they are "well-acquainted with the genuine dangers — and sometimes actual abuse" when candidates solicit contributions from lawyers and others.

Some of the backers of the limits also have pointed to comments from retired Supreme Court Justice Sandra Day O'Connor, who has suggested that she regrets her vote in the 5-4 decision in 2002 to strike down the rules on what judicial candidates can say. O'Connor has said the decision contributed to the politicization of judicial elections.

But the words of another justice who remains on the court might be more important to the outcome of the Florida case. "The state cannot opt for an elected judiciary and then assert that its democracy, in order to work as desired, compels the abridgment of speech," Justice Anthony Kennedy wrote in the 2002 case.

Williams-Yulee received just 20 percent of the vote in 2010. Her appeal for money was no rousing success either. Her lawyer, Andrew Pincus, said it didn't yield a cent.

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Film Finances poised to bring completion bonds to China

SHANGHAI - Leading movie finance company Film Finances Inc. plans to bring modern financing to China, with the opening Monday of a Shanghai branch office.

The company's Film Finances China Cultural Services office is set up within the Shanghai Free Trade Zone, launched by the city government two years ago.

The unit will be headed by former independent producer, April Ye, set as China CEO.

"The product we offer does not currently exist in China and yet hundreds of films get made here," said FFI co-chairman Steve Ransohoff. "Nevertheless, what we aim to do here is to help producers to access capital and provide security to financiers."

"We aim to make a significant contribution and have a professional impact on the Chinese film industry," said Ye. "We will do this through improvements to production execution, through the creation of a credit system, which will in turn create a virtuous cycle and open access to more capital. Third, we hope to help cultivate the much needed profession of film producer in China."

In attendance at the launch event were US executives: producers Jason Blum and Charles Layton; Cyril Drabinsky, vice chairman of Deluxe Entertainment; Stephen Scharf, senior partner of O'Melveny & Myers; and Jeff Colvin, senior VP of Comerica Bank.

"We have already been involved in numerous co-productions with China and movies that have shot in China," said Woolner, FFI co-chairman. "We don't need an office in Shanghai to service co-productions. We are opening the Shanghai office in the expectation that it will be used by [domestic] Chinese productions, though we believe it may also make co-productions easier too."

The Shanghai government has put in place a number of other reforms and proposals to attract international entertainment and media companies to the city. It says that other measures are to be introduced.

"Shanghai is on its way to building a world class film base, with nearly 60 companies media companies signed to open here, and 39 that have now done so," said an official at the event.

© 2015 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC

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Amazon Studios to produce movies for theatrical, digital release in 2015

Amazon Studios said it will produce and acquire original movies for theatrical release and early-window distribution on Amazon Prime Instant Video starting in 2015.

According to Amazon, it expects to produce about 12 movies per year. Amazon said its original movies will premiere on Prime Instant Video in the U.S. just 4 to 8 weeks after their theatrical debut -- versus up to a year for regular windowing.

The move by Amazon comes after Netflix also has launched a bid to enter into the movie sector, announcing plans to debut the sequel to "Crouching Tiger, Hidden Dragon" day-and-date in August 2015 and inking a four-movie deal with Adam Sandler.

The Amazon Original Movies creative development will be led by independent filmmaker Ted Hope. He co-founded and ran production company Good Machine, which produced such films as "Eat Drink Man Woman" and "Crouching Tiger, Hidden Dragon." Earlier this month, Hope stepped down as CEO of Fandor, a streaming-video site specializing in indie and international titles.

"We look forward to expanding our production efforts into feature films," Amazon Studios VP Roy Price said in a statement. "Not only will we bring Prime Instant Video customers exciting, unique, and exclusive films soon after a movie's theatrical run, but we hope this program will also benefit filmmakers, who too often struggle to mount fresh and daring stories that deserve an audience."

As with Netflix, Amazon Studios began with a focus on TV series although movies have been part of its plan since the beginning. Amazon's "Transparent," a half-hour dark comedy from Jill Soloway, won a Golden Globe for best TV musical and comedy series and star Jeffrey Tambor took home the trophy for best actor in a TV comedy.

Hope, whose title is head of production for Amazon Original Movies, commented, "To help carry the torch into the feature film world for such an innovative company is a tremendous opportunity and responsibility. Amazon Original Movies will be synonymous with films that amaze, excite, and move our fans, wherever customers watch."

© 2015 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC

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Netflix 4Q preview: bet on better than 3Q

Netflix's disappointing third-quarter earnings might not bode well for the fourth-quarter results being announced Tuesday, but consider some mitigating factors.

The streaming service is clearly seeing enough of an increasing softening in its domestic subscriber growth to worry investors, which explains why its stock plummeted 20% in the trading session following its 3Q report last year. But while diminished returns in its U.S. sub base is a trend unlikely to reverse, 4Q may not be as bad as the preceding quarter, either.

First, expect Netflix to have gone conservative on guidance this time around after overpromising in 3Q, when domestic subs came in approximately 300,000 below the nearly 1 million that were counted for the quarter. It's bad enough Netflix suffered from a comparison to the 1.3 million that came in the third quarter of 2013, but being off 27% on its guidance in October added insult to injury.

For 4Q, Netflix is predicting 1.85 million subs in the U.S. and 2.15 million across the 50 countries where the streaming service is active overseas. Projecting going from 53 million total subs to roughly 57 million may seem bullish coming after depressed numbers in 3Q, but the last three months of the year are Netflix's high season. Not only does the holiday season mean a lot more connected devices that could potentially expand Netflix's footprint were unwrapped, but Netflix also seems to spend more on advertising itself this time of year.

Even internationally, Netflix may be playing down expectations considering that 4Q may be the first quarter in which the company will see the benefit of its expansion in Western Europe, which had barely begun by the time the company reported earnings in 3Q.

If history is any guide, Netflix is not going to end the year on a low note. The last two 4Qs delivered record stock surges for Netflix, particularly in 2013 when a 42% increase delivered the biggest market-share gain for the company in a decade.

Nevertheless, it's unlikely 4Q will trigger a surge anywhere as big as past years considering U.S. sub growth will still underwhelm Wall Street-just perhaps not as dramatically as it did in 3Q. Growth has been softening for the past seven quarters, and gotten considerably worse over the last two. Even if Netflix hits its guidance numbers, it will still mean a 21% drop in domestic growth.

If Netflix sees its international numbers explode, expect Netflix execs to try and keep the focus there but smart investors won't turn a blind eye to the U.S. considering domestic contribution profits are what's funding overseas expansion.

Netflix CEO Reed Hastings put the blame for 3Q on the higher pricing the company recently instituted. Another bad quarter may draw pointed fingers from outside the company at the launch of its latest original series, "Marco Polo," which didn't seem to generate the buzz of "House of Cards" or "Orange is the New Black."

While the conventional wisdom in the media might be that "Marco Polo" is an expensive dud, that's not necessarily a wise conclusion to make in the absence of any ratings information. Amorphous "buzz" tends to be used as a substitute metric but quantifying what that is, or its value to adding subs even if it could be quantified, is questionable.

© 2015 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC

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Crews to clean up oil spilled from eastern Montana pipeline

BILLINGS, Mont. — Crews worked Monday to clean up crude oil that spilled in and near the Yellowstone River in eastern Montana while officials with Bridger Pipeline LLC tried to determine what caused the weekend breach.

Bridger has said the break in the 12-inch steel pipe happened Saturday morning in an area about 9 miles upstream from Glendive. Bridger spokesman Bill Salvin said Monday that the company is confident that no more than 1,200 barrels — or 50,000 gallons — of oil spilled during the hour-long breach.

"Oil has made it into the river," Salvin said. "We do not know how much at this point."

Oil has been seen in the river in spots 15 and 25 miles downstream from Glendive, Salvin said. Some of the oil is trapped under ice.

The Casper, Wyoming-based company is testing the water in Glendive for any contamination.

The Poplar Pipeline system runs from Canada to Baker, Montana, and carries crude oil from the Bakken oil producing region in Montana and North Dakota. It remained shut down Monday. It receives oil at the Poplar Station in Roosevelt County, Fisher and Richey Stations in Richland County and at Glendive in Dawson County, all in Montana.

The pipeline was last inspected in 2012, Salvin said, and is at least 8 feet below the Yellowstone River bed where it crosses the river near Glendive.

Bridger Pipeline, a subsidiary of True Cos., also owns and operates the Four Bears Pipeline System in North Dakota along with the Parshall Gathering System and the Powder River System in Wyoming, according to the company's website.

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