Google survives antitrust probe with little damage

SAN FRANCISCO Google has settled a U.S. government probe into its business practices without making any major concessions on how the company runs its Internet search engine, the world's most influential gateway to digital information and commerce.

Thursday's agreement with the Federal Trade Commission covers only some of the issues raised in a wide-ranging antitrust investigation that could have culminated in a regulatory crackdown that re-shapes Internet search, advertising and mobile computing.

But that crackdown didn't happen, to the relief of Google and technology trade groups worried about overzealous regulation discouraging future innovation. The resolution disappointed consumer rights groups and Google rivals such as Microsoft Corp., which had lodged complaints with regulators in hopes of legal action that would split up or at least hobble the Internet's most powerful company.

Google is still trying to settle a similar antitrust probe in Europe. A resolution to that case is expected to come within the next few weeks.

After a 19-month investigation, Google Inc. placated the FTC by agreeing to a consent decree that will require the company to charge "fair, reasonable and non-discriminatory" prices to license hundreds of patents deemed essential to the operations of mobile phones, tablet computers, laptops and video game consoles.

The requirement is meant to ensure that Google doesn't use patents acquired in last year's $12.4 billion purchase of Motorola Mobility to thwart competition from mobile devices running on software other than Google's Android system. The products vying against Android include Apple Inc.'s iPhone and iPad, Research in Motion Ltd.'s BlackBerry and Microsoft's Windows software.

Google also promised to exclude, upon request, snippets copied from other websites in capsules of key information shown in response to search requests. The company had insisted the practice is legal under the fair-use provisions of U.S. copyright law. Nonetheless, even before the settlement, Google already had scaled back on the amount of cribbing, or "scraping," of online content after business review site Yelp Inc. lodged one of the complaints that triggered the FTC investigation in 2011.

In another concession, Google pledged to adjust the online advertising system that generates most of its revenue so marketing campaigns can be more easily managed on rival networks.

Google, though, prevailed in the pivotal part of the investigation, which delved into complaints that the Internet search leader has been highlighting its own services on its influential results page while burying links to competing sites. For instance, requests for directions may turn up Google Maps first, queries for video might point to the company's own site, YouTube, and searches for merchandise might route users to Google Shopping.

Although the FTC said it uncovered some obvious instances of bias in Google's results during the investigation, the agency's five commissioners unanimously concluded there wasn't enough evidence to take legal action.

"Undoubtedly, Google took aggressive actions to gain advantage over rival search providers," said Beth Wilkinson, a former federal prosecutor that the FTC hired to help steer the investigation. "However, the FTC's mission is to protect competition, and not individual competitors."

Two consumer rights groups lashed out at the FTC for letting Google off too easily.

"The FTC had a long list of grievances against Google to choose from when deciding if they unfairly used their dominance to crush their competitors, yet they failed to use their authority for the betterment of the marketplace," said Steve Pociask, president of the American Consumer Institute.

John Simpson of frequent Google critic Consumer Watchdog asserted: "The FTC rolled over for Google."

David Wales, who was the FTC's antitrust enforcement chief in 2008 and early 2009, said the agency had to balance its desire to prevent a powerful company from trampling the competition against the difficulty of proving wrongdoing in a rapidly changing Internet search market.

"This is a product of the FTC wanting to push the envelope of antitrust enforcement without risking the danger of losing a case in in court," said Wales, who wasn't involved with the case and is now a partner at the law firm Jones Day.

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James Holmes Defense: Was He Insane?

Jan 3, 2013 5:30pm

James Holmes appears in court, Centennial, Colo., July 23, 2012. RJ Sangosti/AP Images.

ABC’s Clayton Sandell and Carol McKinley report:

A judge ruled Thursday that public defenders for accused Colorado theater shooting suspect James Holmes can call two unidentified witnesses at next week’s preliminary hearing to testify about the defendant’s “mental state.”

Arapahoe County, Colo. prosecutors had sought to keep the witnesses out of court, but Judge William Sylvester ruled that the now-25-year-old accused killer has a right to call the witnesses at a preliminary hearing.

The Jan. 7 preliminary hearing will essentially be a mini-trial in which prosecutors will present witness testimony and evidence to convince the judge that there is enough of a case against Holmes to proceed to a trial.

Witnesses to be called for the prosecution include the Aurora police lead detective, first responders, the Arapahoe County coroner and likely a computer forensic specialist, according to prosecution sources who declined to be identified, citing a gag order in the case.

A top priority, the prosecution sources say, will be showing that Holmes acted with premeditation when he allegedly murdered 12 people and wounded 58 on the night of July 20 during a midnight showing of “The Dark Knight Rises.”

Defense attorneys may pursue a legal strategy to show that Holmes was not in his right mind at the time of the shooting.

Holmes, who has not yet entered a plea, has been repeatedly described in court by his legal team as mentally ill. While a graduate student at the University of Colorado, he was in the care of a psychiatrist.

Prosecutors say they will also present photos, video and 911 calls during the hearing, which is expected to last all week.

It’s not clear what the two witnesses’ relationship is to the shooting, or to Holmes.

Prosecutors, Judge Sylvester’s order says, contend that “neither witness has personal knowledge of the events at the Century Aurora 16 Theater.”

Sylvester said the witnesses are non-expert “lay witnesses” who have so far chosen not to be interviewed by defense investigators but have been cooperating with law enforcement.

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Humble coin toss thrust to heart of multiverse debate

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Clinton out of hospital, keen to resume work

NEW YORK: US Secretary of State Hillary Clinton was released from a New York hospital late Wednesday and is expected to make a full recovery from a rare blood clot in her head, a top aide said.

"Secretary Clinton was discharged from the hospital this evening," Deputy Assistant Secretary Philippe Reines said in a statement, three days after the 65-year-old diplomat was admitted for treatment.

"Her medical team advised her that she is making good progress on all fronts, and they are confident she will make a full recovery," he said, adding that Clinton was "eager to get back to the office."

Earlier the top US diplomat, bundled up against the cold in a winter coat and wearing dark glasses, appeared in public for the first time in almost a month, when she came out of a building at the New York Presbyterian Hospital.

It was the first time Clinton had been seen since catching a stomach virus on returning from a trip to Europe on December 7, which triggered a series of health scares and forced her to cancel a planned visit to North Africa.

Accompanied by her smiling husband, former president Bill Clinton, as well as her daughter Chelsea and several aides, Clinton walked unaided to a waiting black van at the hospital, according to images broadcast by CNN.

Both Clinton and her family "would like to express their appreciation for the excellent care she received from the doctors, nurses and staff at New York Presbyterian Hospital Columbia University Medical Center," Reines added.

He did not say when the secretary would return to work though, promising only to issue an update in the coming days. She is due to step down after four years in office later this month, handing the baton to Senator John Kerry, who has been nominated by President Barack Obama to replace her.

"Grateful my Mom discharged from the hospital & is heading home. Even more grateful her medical team confident she'll make a full recovery," Chelsea Clinton said in a tweet.

Kerry's appointment will have to be confirmed by the new Senate, due to be sworn in on Thursday, but as a veteran, well-respected senator he is expected to sail through the hearing.

Earlier, State Department spokeswoman Victoria Nuland said Clinton had been busy keeping in touch by telephone.

"She has been talking to her staff, including today. She's been quite active on the phone with all of us," Nuland told journalists.

The globe-trotting diplomat was admitted to the hospital on Sunday after a routine scan revealed the clot in a vein behind her right ear in the space between her skull and her brain.

Her doctors Lisa Bardack, from the Mount Kisco Medical Group, and Gigi El-Bayoumi, of George Washington University, said in a statement on Monday that Clinton had not suffered a stroke or any neurological damage.

They said however they would be treating Clinton with blood thinners to break up the clot, which if left untreated could be potentially dangerous.

The effects of the stomach bug caused her to become dehydrated. She then fainted and suffered a concussion, which is thought to have brought on the blood clot.

Clinton still has some unfinished business as she wraps up her popular tenure at the State Department, and is widely expected to testify before the end of the month on the September 11 attack on a diplomatic mission in Libya.

She had been due to appear at hearings last month, after a State Department inquiry found security at the Benghazi mission was "grossly inadequate" but was forced to cancel after she fell ill. Four Americans died in the attack.

Republican Representative Peter King said he believed she still needed to testify "and I think she will be pleased to do it. I never have known Hillary Clinton to back away from a fight."

But King told CNN she should not appear before Congress "until she is absolutely in perfect health."

-AFP/ac

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Hillary Clinton discharged from New York hospital

STORY HIGHLIGHTS

• Clinton is "making good progress on all fronts" and has been discharged


• She has been hospitalized since Sunday after doctors found a blood clot in her head


• Clinton has been on the phone and talking with aides, a spokeswoman says


• The 65-year-old secretary plans to step down once the Senate confirms a successor

(CNN) -- Secretary of State Hillary Clinton was discharged from a New York hospital on Wednesday, three days after she was admitted for treatment of a blood clot in a vein between her skull and brain, the State Department announced.

"Her medical team advised her that she is making good progress on all fronts, and they are confident she will make a full recovery," Clinton spokesman Philippe Reines said in a statement announcing her release.

Clinton walked out of New York Presbyterian Hospital accompanied by her husband, former President Bill Clinton, and daughter, Chelsea, for a brief period earlier Wednesday afternoon. The appearance led to speculation about her release, which was announced a couple hours later.

She had been admitted Sunday, after doctors found the clot during a medical test related to a concussion she suffered in December.

The secretary is being treated with blood thinners to dissolve the clot, which has not resulted in a stroke or any neurological damage. Doctors expect her to make a full recovery.

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Earlier, State Department spokeswoman Victoria Nuland told reporters that Clinton was in communication with aides and there was nothing new on her condition or treatment.

Clinton "has been quite active on the phone with all of us, but she also made some calls on Saturday to a couple of foreign officials," Nuland said.

Those official calls came before the blood clot was disclosed Sunday. The first, to the joint special envoy on Syria, Lakhdar Brahimi, lasted a half hour. The second was to the prime minister of Qatar, who is also the foreign minister.

"She has begun to pick up her regular phone contact with some of her counterparts," Nuland added.

Clinton, 65, has not been publicly seen or heard from in more than three weeks since falling ill with severe stomach flu and a subsequent concussion that occurred when she fainted because of dehydration, officials said.

Questions also have been raised as to why there was almost a day's delay in explaining the precise location of the clot and why she was administered an MRI, which revealed the problem.

Nuland said officials have been "extremely forthcoming" about Clinton's health.

"We will continue to keep you updated as we have new information to share, as we've been doing all along," Nuland said. "I think that was eighth statement in some three weeks so please bear with us."

Asked how Clinton's illness might affect her plans to testify on Capitol Hill about the deadly September terror attack on the U.S. diplomatic mission in Benghazi, Libya. Nuland did not directly say whether Clinton would appear.

"She has said that she is open to going up to the Hill. We are working with them now on their schedule because there's also a question of when they are going to be in and we will let you know when we have something to share," Nuland said.

Clinton, a former first lady, New York senator and presidential candidate, does not plan to stay on for President Barack Obama's second term, but prefers to remain until her replacement is in place.

Some senators have said they would delay confirmation hearings for her proposed successor, Sen. John Kerry, until Clinton has testified on the Libya attack that killed Ambassador Christopher Stevens and three other Americans.

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Hillary Clinton discharged from hospital

WASHINGTONSecretary of State Hillary Clinton was discharged from a New York hospital Wednesday, after spending 72 hours under observation following the discovery of a blood clot in her head, the State Department said.

In a statement, spokesperson Philippe Reines said: "Her medical team advised her that she is making good progress on all fronts, and they are confident she will make a full recovery. She's eager to get back to the office."

Clinton and her family thanked her medical team "for the excellent care she received," Reines said.

Earlier Wednesday, Clinton had been seen in public for the first time in three weeks when she walked out of the Harkness Eye Institute in New York City and into a secure van along with a smiling Bill and Chelsea Clinton and accompanied by a security detail, reports CBS News correspondent Margaret Brennan.

The State Department had said Secretary Clinton was active in speaking with staff and reviewing paperwork while she continued to recover at New York Presbyterian Hospital.

Clinton was admitted to a New York hospital Sunday and was treated with blood thinners to dissolve a clot in the vein behind the right ear. Doctors found the clot during a follow-up exam stemming from a concussion she suffered in early December. She has been hospitalized for around 72 hours, which is a window of time during which it is possible to establish the proper blood thinner dosage that would be required prior to discharge according to doctors.

Clinton's doctors say there was no neurological damage.

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Tax Deal Done - but Where's Obama to Sign It?

Jan 2, 2013 6:29pm

AP Photo/Charles Dharapak

Congress officially delivered the bill to avert the fiscal cliff to the White House this afternoon, House Speaker John Boehner’s office told ABC News.

Now the question is when will the President sign it?

The bill, passed late on New Year’s Day, expires tomorrow at 11:59 a.m. when the current session of Congress concludes. If President Obama doesn’t sign it by then, constitutionally the bill is dead.

But this evening, eighteen hours before the deadline, the President is on a golf course in Hawaii.  And the bill is in Washington at the White House.

Administration officials won’t say what they will do despite repeated inquiries from ABC News.

There seem to be two options:  1) An Air Force jet can deliver the bill to Hawaii (better leave quickly!) in time for the President to sign it before 11:59 Eastern Standard Time; or, 2) The White House can use a presidential “auto-pen.”

The simple mechanical device uses a template of the presidential signature to scrawl it on paper if activated by the White House at Obama’s direction.

But would an auto-pen – usually used to sign insignificant correspondence and photographs – pass constitutional muster?  We don’t know.  The question has never been tested by the courts.

A 2005 legal study commissioned by former President George W. Bush determined that use of the autopen is constitutional but acknowledged the possibility that its use could be challenged.  Bush never used the autopen, officials from his administration told ABC.

President Obama is only believed to have used the autopen once to sign a piece of major legislation — the 2011 extension of the Patriot Act — which reached his desk while he was on a diplomatic trip to Europe. Officials invoked national security concerns to justify the move.

Use of the autopen has been controversial.  Conservative groups alleged last summer that Obama used an autopen to sign condolence letters to the families of Navy SEALs killed in a Chinook crash in Afghanistan — a charge the White House disputed flatly as false.

In 2004, then-Secretary of Defense Donald Rumsfeld was criticized for using an autopen to sign condolence letters to the families of fallen troops.

And in 1992 then-Vice President Dan Quayle even got into some hot water over his use of the autopen on official correspondence during an appearance on “This Week with David Brinkley.” More HERE.

ABC News’ Ann Compton and Devin Dwyer contributed reporting.

SHOWS: World News

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In-depth 2012: The best long reads of the year

Read more: "2013 Smart Guide: 10 ideas that will shape the year"

Dig deeper, look closer and think harder – these are the goals of New Scientist's in-depth articles. Each one is perfect for saving in your favourite read-it-later app and curling up in front of a glowing tablet for a good long read.

These are our editors' picks of our best features of the year, and all are prime examples of the amazing breadth of big ideas that were ripe for the tackling in 2012. When you have finished digesting these readable meals, visit our in-depth articles archive if you're hungry for more.

Richard Webb: "You might not have heard of the algorithm that runs the world." I certainly hadn't, or that its mathematical foundations are starting to look a little wobbly. An eye-opening examination of how seemingly abstruse mathematics is in fact deeply embedded in modern life: "The algorithm that runs the world"

Sally Adee: Gastric bypass surgery is the best surgery you're not getting, said Dr Oz on his popular medical advice show in the US. Because of enthusiasm from people like him, this operation has become massively popular – but by whimsically hacking at our stomach, might we might be messing with a system far more complicated than anyone really understands? Samantha Murphy had the surgery and began to realise that losing 45 kilograms could come with some profound neurological trade-offs: "Change your stomach, change your brain"

Michael Le Page: Nowadays most people either haven't heard of the 1970 book The Limits to Growth, or believe – wrongly – that the research it was based on has been discredited. But the main message of Limits is perhaps more relevant than ever – that a delayed response to mounting environmental problems leads to catastrophe further down the line: "Boom and doom: Revisiting prophecies of collapse"

Richard Fisher: This is a simple story about a scientific mystery. Strange rumbles, whistles and blasts have been reported all over the world for centuries. In New York state, they are called "Seneca guns"; in the Italian Apennines they are described as brontidi, which means thunder-like; in Japan they are yan; and along the coast of Belgium they are called mistpouffers – or fog belches. Yet the cause is often unexplained – what on Earth could be behind them? "Mystery booms: The source of a worldwide sonic enigma"

Valerie Jamieson: It's been a sensational year for particle physics, but the Higgs boson isn't the only fascinating particle in town. Meet 11 more particles that change our understanding of the subatomic world: "11 particles for 11 physics puzzles"

David Robson: What is the secret of the legendary "flow state" that seems to mark out genius in everyone from piano virtuosos to tennis champions? With the latest brain stimulation techniques, it may soon be within everyone's reach, and Sally Adee writes with panache as she describes her own use of the technology during a terrifying marksmanship training session. This has everything I want to read in a story – drama, a revolutionary idea and some practical advice for anyone to try at home: "Zap your brain into the zone: Fast track to pure focus"

Graham Lawton: The writer of this article, Christopher Kemp, is a self-confessed lover of marginalia – nooks and crannies of science that are often overlooked. But as this beautifully written story reveals, those nooks and crannies often contain rich and fascinating material. Material, in fact, like ambergris: "Heaven scent: The grey gold from a sperm whale's gut"

Ben Crystall: Many people may remember the wonder material Starlite from an episode of BBC TV's Tomorrow's World – it seemed to have a miraculous ability to withstand fire and heat. So what happened to it? In this feature Richard Fisher uncovers the strange tale of Starlite and its eccentric inventor Maurice Ward, and on the way reveals fascinating details about Ward and his creation. And though Ward is dead, the story may not be over – it now looks like Starlite could get a second chance… "The power of cool: Whatever became of Starlite?"

Clare Wilson: I enjoyed working on this feature the most this year because to me it truly represents the future of medicine. New Scientist often predicts that some new medicine or technology will be available in five years' time. When it comes to using gene therapies or stem cell therapies on babies in the womb – the subject of this feature – the timeline is probably more uncertain, yet I don't see how anyone can doubt that some day it will happen: "Fetal healing: Curing congenital diseases in the womb"

If you would like to reuse any content from New Scientist, either in print or online, please contact the syndication department first for permission. New Scientist does not own rights to photos, but there are a variety of licensing options available for use of articles and graphics we own the copyright to.

All comments should respect the New Scientist House Rules. If you think a particular comment breaks these rules then please use the "Report" link in that comment to report it to us.

If you are having a technical problem posting a comment, please contact technical support.

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Tennis: Ferrer avoids falling into a hole

DOHA: Top-seeded David Ferrer started the new season with a dropped first set here Tuesday to Dustin Brown, a qualifier outside the world's top 150, and a damaged court which opened like a crater on the moon.

Repairs appeared to involve tape and glue on a tear about five feet behind the baseline where Ferrer's heel had ripped into the surface.

There was also an anxious-looking conference and a ball-boys' impromptu Gangnam-style dance session on the playing area during a delay which lasted more than an hour.

It was eventually two and a half hours before the world number five from Spain survived his first round in the Qatar Open by 5-7, 6-3, 6-2 against Brown who is a tall, Jamaica-based German nicknamed "Dreddy," with impressive locks flying down to the small of his back.

"None of it was easy," said Ferrer, which was an understatement. Brown was unusual for his aggressive serving, eager forward movement, and willingness to volley, and other circumstances must have seemed to Ferrer bizarrely familiar.

Two years ago, he and Andy Roddock were forced off their court at the US Open by a crack near the baseline which let the water through, and required them to change courts, and last year at New York, a tornado forced Ferrer and Novak Djokovic to interrupt their semi-final by an entire day.

Roddick tweeted a solution for Doha, suggesting they should "move Ferrer to court 13" - the court number where the American completed his 2011 US Open win over the Spaniard. Ferrer chortled his laughter when he heard.

Later Ferrer commented on the oddities which had afflicted him in the last two years by saying: "Yeah - so many things, yeah. Too many things."

Asked if something were following him around, he said: "Something, yes - it's bad luck. I don't even know why."

This time Ferrer had a more fortunate resumption. Though a set down he broke Brown's serve at once, and consolidated that advantage right through the second set.

He then making another crucial break at the start of the third set, by which time the favourite was accelerating towards safety.

The seedings say that Ferrer should play a final on Saturday with Richard Gasquet, the world number ten from France, whose fluency appeared only intermittently during a 6-3, 6-4 over Jan Hernych, a 33-year-old Czech qualifier.

Hernych struck his ground strokes more often inside the baseline than Gasquet - often a sign of potential dominance - but missed with three of his four break point chances.

Gasquet's confidence improved markedly after breaking serve at the start of the second set and never looked like being pegged back, dropping only five points in his next five service games.

He could have a semi-final with his compatriot Gael Monfils, last year's runner-up, whose first match in two and a half months was a comfortable re-introduction, a 6-0, 6-3 win over the local wild card player, Mousa Shanan Zayed.

However, Monfils' next encounter is a potentially tough one, against Philipp Kohlschreiber, the third-seeded German.

He may also be mindful of the fate of another Frenchman, Jeremy Chardy, the fifth seed but a 6-4, 6-4 loser to a German qualifier, Daniel Brands.

-AFP/ac

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GOP anger threatens to undo deal

STORY HIGHLIGHTS

• NEW: A GOP source says the House is likely to vote on some version of the deal Tuesday night


• House Majority Leader Eric Cantor does not support the Senate compromise


• Other GOP representatives say more must be done to cut spending


• Lawmakers are under a tight deadline; A new Congress will be sworn in Thursday

With the fiscal cliff deal in limbo, what's your New Year's message to Washington? Go to CNN iReport to share your video.

(CNN) -- A last-ditch Senate compromise to avert the fiscal cliff appeared to be in jeopardy with House Republicans slamming the deal negotiated with the White House and demanding more must be done to cut spending.

The measure that sought to maintain tax cuts for most Americans but increase rates on the wealthy passed the Democratic-led Senate overwhelmingly early on Tuesday. But Republican frustration over deficit-reduction muddled prospects for final action in the GOP-controlled House.

"This is not a good deal," said Rep. Steve LaTourette of Ohio. "This is a sad state of affairs -- that we're going to take a bill that was passed on New Year's Eve by some sleep-deprived octogenarians that has very, very heavy on taxes and does nothing to cut spending, which is really part of the big problem that we have in the country."

The Senate bill would raise roughly $600 billion in new revenues over 10 years, according to various estimates.

Blog: Read the latest updates from CNN's political team

House Republicans met on Tuesday to discuss the next steps — whether to consider the bill as written -- a so-called up or down vote -- or amend it and send it back to the Senate.

Republican leaders gauged support for adding an estimated $300 billion in spending cuts, according to GOP sources. Those reductions, however, would be delayed for two months.

If approved, that plan would require additional action by the Senate, which adjourned until Wednesday.

The other option was to pass the Senate bill as written.

Time was crucial, however, as a new Congress is set to be sworn-in on Thursday. Congress would have to start over with votes if there was no action on the Senate bill or any other proposal by then.

The legislation as writtren now would avert much of the fiscal cliff's negative near-term economic impact by extending the Bush-era tax cuts for the majority of Americans. It would also extend long-term unemployment benefits that were set to expire.

If the House doesn't act and the tax cuts enacted last decade expire fully, broad tax increases will kick in as will $110 billion in automatic cuts to domestic and military spending.

The nonpartisan Congressional Budget Office has predicted the combined effect could dampen economic growth and possibly tip the United States into recession.

Global financial markets watched developments in Washington closely. Wall Street, which was closed on Tuesday due to the holiday, rallied on Monday on prospects that a deal finally would be approved by a bitterly divided Congress.

"This Congress unfortunately has been most known for a unwillingness to compromise, an unwillingness to come together to act on behalf of the American people," said House Democratic Whip Steny Hoyer. "Today is Jan 1st. Taxes will be going up on everybody in America if we don't act."

House Minority Leader Nancy Pelosi told reporters that Democrats were eager to see what Republicans would put on the floor.

"Up until now, (Speaker John Boehner) has said when the Senate acts, we will have a vote in the House. That is what he said. That is what we expect. That is what the American people deserve, so we look forward now ... to see what the timing will be for a straight up or down vote on what passed 89-8 last night in the United States Senate," Pelosi said.

But not all congressional Democrats were happy with the proposal. Liberals, especially, believed it was not tough enough on the rich.

Read more: 5 things to know about the fiscal cliff

Sen. Tom Harkin, D-Iowa, complained that the deal "makes tax benefits for high-income earners permanent, while tax benefits designed to help those of modest means and the middle class are only extended for five years."

The plan would maintain tax cuts for individuals earning less than $400,000 and couples earning less than $450,000.

It would raise tax rates for those over those levels -- marking the first time in two decades the rates jump for the wealthiest Americans.

The proposal would temporarily extend certain tax breaks, such as the one for college tuition, while making new tax rates permanent.

President picks up bragging rights, breaks a promise

While the deal gives President Barack Obama bragging rights for raising taxes on the wealthiest Americans, it also leaves him breaking a promise.

Obama had vowed to raise tax rates for the top-earning 2% of Americans, including those with household income above $250,000, and individuals earning more than $200,000.

"What I'm not going to do is to extend Bush tax cuts for the wealthiest 2% that we can't afford and, according to economists, will have the least positive impact on our economy," the president said at a news conference in November, after being asked by CNN why Americans should believe he would not "cave again this time" by allowing those Bush-era tax cuts to be extended.

When asked whether closing loopholes instead of raising rates would be satisfactory, the president responded, "when it comes to the top 2%, what I'm not going to do is to extend further a tax cut for folks who don't need it, which would cost close to a trillion dollars. And it's very difficult to see how you make up that trillion dollars, if we're serious about deficit reduction, just by closing loopholes in deductions. You know, the math tends not to work."

The deal passed by the Senate would cap itemized deductions for individuals making $250,000 and for married couples making $300,000.

Raising the threshold for higher tax rates to $400,000 shrinks the number of Americans affected. While nearly 2% of filers have adjusted gross incomes over $250,000, only 0.6% have incomes above $500,000, according to the Tax Policy Center.

Going over the fiscal cliff: Messages to Washington

Still, in a written statement early Tuesday, the president held on to the 98% figure he has so often touted.

The deal "protects 98% of Americans and 97% of small business owners from a middle class tax hike," he said. "While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay."

Obama also acknowledged, "There's more work to do to reduce our deficits, and I'm willing to do it. But tonight's agreement ensures that, going forward, we will continue to reduce the deficit through a combination of new spending cuts and new revenues from the wealthiest Americans."

However, many Americans are still likely to see their paychecks shrink somewhat, due to a separate battle over payroll taxes.

What the Senate proposes

Read the bill (pdf)

Under the Senate package:

-- Taxes would stay the same for most Americans. But they will increase for individuals making more than $400,000 and couples making more than $450,000. For them, it will go from the current 35% to the Clinton-era rate of 39.6%.

-- Itemized deductions would be capped for those making $250,000 and for married couples making $300,000.

-- Taxes on inherited estates will go up to 40% from 35%.

-- Unemployment insurance would be extended for a year for 2 million people.

-- The alternative minimum tax -- a perennial issue -- would be permanently adjusted for inflation.

-- Child care, tuition and research and development tax credits would be renewed.

-- The "Doc Fix" -- reimbursements for doctors who take Medicare patients -- will continue, but it won't be paid for out of the Obama administration's signature health care law.

-- A spike in milk prices will be avoided. Agriculture Secretary Tom Vilsack said milk prices would have doubled to $7 a gallon because a separate agriculture bill had expired.

What's not addressed

While the package provides some short-term certainty, it leaves a range of big issues unaddressed.

It doesn't mention the debt ceiling, and temporarily puts off for two months the automatic cuts in federal spending that would have taken effect Wednesday. It would have reduced the budgets of most agencies and programs by 8% to 10%.

This means that, come late February, Congress will have to tackle both those thorny issues.

Read more: 3 more fiscal cliffs loom

CNN's Ed Payne, Matt Smith, Mike Pearson, Jessica Yellin, Dana Bash, Deirdre Walsh, Lisa Desjardins, Ted Barrett and Ashley Killough contributed to this report.

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