1. OBAMA LOBBIES FOR HELP ON FISCAL CLIFF
President Obama is meeting to discuss the looming fiscal cliff with business leaders at the White House on Wednesday, after telling labor leaders on Tuesday that he would not back down on his pledge to make the wealthiest Americans pay more in taxes as part of a deficit-reduction deal to avert economy-busting tax hikes and spending cuts due to hit at the end of the year. Obama plans to open talks with congressional leaders later this week with a call, included in his most recent budget proposal, to hike taxes on corporations and the wealthy by $1.6 trillion over a decade, which is twice as much as House Speaker John A. Boehner (R-Ohio) offered Obama during secret debt negotiations last year. Republicans say they're willing to discuss raising revenue, but they warned the freshly re-elected president not to overplay his hand. "I'm not asking the president... to adopt our principles," Senate Minority Leader Mitch McConnell (R-Ky.) said. "I'm simply asking him to respect our principles by not insisting that we compromise them. Because we won't." [Washington Post]
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2. CHINA'S HU JINTAO STEPS ASIDE
Chinese President Hu Jintao stepped down as leader of the ruling Communist Party on Wednesday, clearing the way for Vice President Xi Jinping to take control of the party on Thursday. China is wrapping up its once-a-decade transfer of power, with Hu's generation — in their late 60s — handing the reins to Xi's late-50s cohort. It's unknown whether Hu will stay on as head of the powerful commission that oversees the military for a transition period. This is only the second orderly transfer of power in the Communist Party's 63 years ruling China. [Associated Press]
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3. PANETTA STANDS BY GEN. ALLEN
The fallout from the sex scandal that brought down former CIA director David Petraeus continued on Wednesday. Defense Secretary Leon Panetta said Marine Gen. John Allen has his "continued confidence to lead our forces" even though he is, for now, holding up Allen's nomination to become NATO's supreme allied commander pending an investigation into the general's connection to a central figure in the convoluted case. Allen is under scrutiny over "flirtatious" email messages with Jill Kelley — the woman whose complaint to the FBI about harassing emails led to the discovery of Petraeus' affair with his biographer, Paula Broadwell, who apparently considered Kelley a romantic rival. Kelley reportedly tried to call off the investigation once she realized it could make details about her private life public. [CNN]
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4. FRANCE RECOGNIZES SYRIAN REBELS
French President Francois Hollande on Tuesday formally recognized Syria's new opposition coalition as the "sole legitimate representative of the Syrian people." France is the first Western democracy to endorse the coalition since Syria's opposition groups, which have tested the U.S.' patience with their internecine squabbling, struck a deal on Sunday to unite against the regime of Syrian President Bashar al-Assad. Hollande also said France would consider arming Syria's rebels directly once the coalition, the National Coalition of Syrian Revolutionary and Opposition Forces, forms a government. The U.S. and Britain have yet to give the coalition their blessing, with British Foreign Minister William Hague arguing that it first has to prove that it has support within Syria. [New York Times]
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5. ANTI-AUSTERITY STRIKES SPREAD IN EUROPE
Millions of workers went on strike across Europe on Wednesday to protest deep spending cuts and tax hikes that governments are imposing to reduce crippling deficits. Train service was halted in Spain and Portugal, and students venting against education cuts pelted police with rocks in Rome. Demonstrators in Spain argued that the austerity measures were only making the country's economic crisis worse. Several people were arrested in clashes with police in Madrid. "We're on strike to stop these suicidal policies," said Candido Mendez, head of Spain's second-biggest labor federation, the General Workers' Union, or UGT. [Reuters]
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6. PAKISTAN FREES TALIBAN PRISONERS
At the request of Afghanistan's government, Pakistan freed seven Taliban prisoners on Wednesday as a gesture of goodwill meant to facilitate peace negotiations. Some sources have described the men who were released as low- to mid-level fighters, but Afghan sources told the BBC that the former Taliban justice minister Mullah Turabi and two intelligence officials were among the group to be set free. Afghan officials called the move a step toward peace, as the freed prisoners could command enough respect to persuade other Taliban leaders to end their decade-long fighting against U.S., NATO, and Afghan forces. [BBC News]
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7. ARMY SEEKS DEATH FOR AFGHAN MASSACRE SUSPECT
At a pretrial hearing for Staff. Sgt. Robert Bales — accused of killing 16 Afghan civilians, including at least nine children, in March — military prosecutor Maj. Rob Stelle said the attack was so heinous that it warranted the death penalty. Bales' lawyer, Emma Scanlan, said Bales had been under a potentially mind-altering cocktail of alcohol, steroids, sleeping pills, and stress. The officer presiding over the inquiry will issue his opinion on how the case should proceed, although higher military officials will have the final say. The military hasn't executed a service member since 1961. [New York Times]
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8. ARAFAT'S GRAVE OPENED
Palestinian authorities began opening Yasser Arafat's grave on Tuesday, starting a painstaking process that will allow investigators from France, Switzerland, and Russia to test his remains for signs of poisoning. Originally, the Palestinian leader was found to have died in France from natural causes in 2004, but France opened a murder investigation after investigators found high levels of a potentially deadly radioactive substance on some of Arafat's personal belongings, and his widow, Suha Arafat, requested that his body be exhumed to see if he had been poisoned. Removing the concrete and stones covering the grave — carefully, by hand — is expected to take two weeks. [CNN]
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9. SOFTWARE PIONEER MCAFEE IN HIDING
Authorities in Belize are searching for anti-virus software pioneer John McAfee, who went into hiding three days ago when police arrived at his house to question him about the murder of his neighbor, an American expatriate named Gregory Faull. The men had quarreled about the barking of McAfee's dogs, four of whom were found poisoned last week at McAfee's beachside compound. Two days later, Faull was found dead, shot in the back of he head, in his villa. McAfee says local authorities are trying to frame him, and will torture a confession out of him. "You can say I'm paranoid about it," he said in a phone call to Wired magazine from hiding, "but they will kill me, there is no question." [Wired]
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10. ELMO PUPPETEER'S ACCUSER RECANTS
The man who accused Elmo puppeteer Kevin Clash of having sex with him when he was a teenage boy has recanted, saying through a lawyer that they had a consensual relationship when he was an adult. The abrupt reversal came just a day after the allegation surfaced on the gossip website TMZ. Clash, who has performed as the voice of the popular Sesame Street character since 1984, said through a spokeswoman that he was "relieved that this painful allegation has been put to rest." Clash took a leave of absence on Sunday, and did not immediately discuss plans to return to work. [Washington Post]
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