Closing Tax Loopholes Not Enough to Avert 'Cliff'?

Closing "corporate tax loopholes" sure sounds good to the average, non-corporate American -- so good, in fact, that politicians talk about it all the time.

House Speaker John Boehner's fiscal-cliff proposal purports to raise $1.6 trillion in revenue by "clos[ing] special-interest loopholes and deductions while lowering rates."

The White House, meanwhile, has complained that Boehner hasn't offered specific loopholes to cut.

On the other side of the aisle, House Democrats have repeatedly offered up "closing overseas tax loopholes" as a means to pay for spending bills -- a plan Republicans routinely reject. In the last two and a half years, President Obama has often been heard griping about writeoffs for corporate jets.

For both Republicans and Democrats, "corporate tax loopholes" are an old saw. But, like most things in politics, raising revenue from "loopholes" gets a bit stickier when the specifics are hashed out.

A misconception about tax "loopholes," some experts say, is that they're loopholes -- gaps in the tax law that corporations have exploited against the law's intent.

Carolyn Kaster/AP Photo; Pablo Martinez Monsivais/AP Photo

Fiscal Cliff Battle: President Obama vs. Speaker John Boehner Watch Video

"Most of these proposals were not 'loopholes,' these were incentives," said Eric Toder, co-director of the left-leaning Tax Policy Center.

For example, take the research-and-development tax credit. During the campaign, both Obama and Mitt Romney suggested making it permanent.

"One wouldn't call the research credit a loophole," Toder said.

Cashing in by closing the biggest "loopholes" could be a politically fraught endeavor. To generate meaningful revenue, House Republicans would have to sign off on measures that raised it from taxing the overseas profits of multinational corporations, from ending immediate writeoffs of equipment purchases, or from ending a credit for domestic manufacturing.

When the Joint Committee on Taxation scored some of these provisions, as part of a tax-reform bill pushed by Democratic Sen. Ron Wyden and then-GOP-senator Judd Gregg, it found the government could save significantly:

Savings Over 10 Years: 2011-2021

Taxing Overseas Profits of Multinational Corps: $582.7 billion. In other words, the "overseas tax loophole" Democrats are fond of trashing. While most countries with large economies tax only profits made at home, the U.S. code taxes all income everywhere. To offset the different, U.S. multinational corporations receive credits to prevent double taxing. They also can defer paying any tax on foreign income, until they transfer the money back to the United States.

Taxing that profit could generate significant revenue. But this could be controversial, and large corporations would fight it. A senior aide to one business lobbying group said ending foreign-income deferral would amount to double-taxing U.S. companies and put them at a disadvantage to foreign competitors; one supporter of ending deferral suggested U.S. companies have been able to hide profits overseas, avoiding taxes altogether.

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IMF loan to Egypt delayed amid political turmoil

CAIRO (Reuters) - A vital $4.8 billion International Monetary Fund loan to Egypt will be delayed until next month, its finance minister said on Tuesday, intensifying the political crisis gripping the Arab world's most populous nation.

As rival factions gathered in Cairo for a new round of demonstrations, Finance Minister Mumtaz al-Said said the delay in the loan agreement was intended to allow time to explain a heavily criticised package of economic austerity measures to the Egyptian people.

The announcement came after President Mohamed Mursi on Monday backed down on planned tax increases, seen as key for the loan to go ahead. Opposition groups had greeted the tax package, which included duties on alcoholic drinks, cigarettes and a range of goods and services, with furious criticism.

"Of course the delay will have some economic impact, but we are discussing necessary measures (to address that) during the coming period," the minister told Reuters, adding: "I am optimistic ... everything will be well, God willing."

Prime Minister Hisham Kandil said Egypt had requested that the loan be delayed by a month.

"The challenges are economic not political and must be dealt with aside from politics," he told a news conference.

Kandil said the reforms would not hurt the poor. In a bid to rebuild consensus, he said there would be a national dialogue about the economic program next week.

GUNMEN OPEN FIRE

On the streets of the capital, tensions ran high after nine people were hurt when gunmen fired at protesters camping in Tahrir Square, according to witnesses and Egyptian media.

The opposition has called for a major demonstration it hopes will force Mursi to postpone a referendum on a new constitution.

Thousands of flag-waving Islamist Mursi supporters, who want the vote to go ahead as planned on Saturday, assembled at a nearby mosque, setting the stage for further street confrontations in a crisis that has divided the nation of 83 million.

The upheaval following the fall of Hosni Mubarak last year is causing concern in the West, in particular the United States, which has given Cairo billions of dollars in military and other aid since Egypt made peace with Israel in 1979.

The turmoil has also placed a big strain on the economy, sending foreign currency reserves down to about $15 billion, less than half what they were before the revolt two years ago as the government has sought to defend the pound.

"Given the current policy environment, it's hardly a surprise that there's been a delay, but it is imperative that the delay is brief," said Simon Williams, HSBC economist in Dubai. "Egypt urgently needs that IMF accord, both for the funding it brings and the policy anchor it affords."

The IMF deal had been seen as giving a seal of approval to investors and donors about the government's economic plans, vital for drawing more cash into the economy to ease a crushing budget deficit and stave off a balance of payments crisis.

MASKED ATTACKERS

In central Cairo, police cars surrounded Tahrir Square in central Cairo, the first time they had appeared in the area since November 23, shortly after a decree by Mursi awarding himself sweeping temporary powers that touched off widespread protests.

The attackers, some masked, also threw petrol bombs that started a small fire, witnesses said.

"The masked men came suddenly and attacked the protesters in Tahrir. The attack was meant to deter us and prevent us from protesting today. We oppose these terror tactics and will stage the biggest protest possible today," said John Gerges, a Christian Egyptian who described himself as a socialist.

The latest bout of unrest has so far claimed seven lives in clashes between the Islamist Muslim Brotherhood and opponents who are also besieging Mursi's presidential palace.

The elite Republican Guard which protects the palace has yet to use force to keep protesters away from the graffiti-daubed building, now ringed with tanks, barbed wire and concrete barricades.

The army has told all sides to resolve their differences through dialogue, saying it would not allow Egypt to enter a "dark tunnel". For the period of the referendum, the army has been granted police powers by Mursi, allowing it to arrest civilians.

The army has portrayed itself as the guarantor of the nation's security, but so far it has shown no appetite for a return to the bruising front-line political role it played after the fall of Mubarak, which severely damaged its standing.

OPPOSITION MARCHES

Leftists, liberals and other opposition groups have called for marches to the presidential palace later on Tuesday to protest against the hastily arranged constitutional referendum planned for December 15, which they say is polarising the country and could put it in a religious straightjacket.

Mohamed ElBaradei, a prominent opposition leader and Nobel prize winner, called for dialogue with Mursi and said the referendum should be postponed for a couple of months due to the chaotic situation.

"This revolution was not staged to replace one dictator with another," he said in an interview with CNN.

Outside the presidential palace, anti-Mursi protesters huddled together in front of their tents, warming themselves beside a bonfire in the winter air.

"The referendum must not take place. The constitution came after blood was spilt. This is not how a country should be run," said Ali Hassan, a man in his 20s.

Opposition leaders want the referendum to be delayed and hope they can get sufficiently large numbers of protesters on the streets to change Mursi's mind.

Islamists, who dominated the body that drew up the constitution, have urged their followers to turn out "in millions" in a show of support for the president and for a referendum they feel sure of winning.

The opposition says the draft constitution fails to embrace the diversity of the population, a tenth of which is Christian, and invites Muslim clerics to influence lawmaking.

(Writing by Giles Elgood; Editing by Peter Graff and Will Waterman)

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US trade gap widens in October as exports fall

WASHINGTON - The US trade deficit widened in October as exports fell sharply from the prior month amid a slowing global economy, government data released Tuesday showed.

The trade gap increased to US$42.2 billion from a revised US$40.3 billion in September, the Commerce Department said.

Exports fell by 3.6 percent, while imports fell by 2.1 percent.

The decline in exports was the sharpest since January 2009, led by a 4.8 percent drop in goods exports.

"Trade looks to contribute slightly to US GDP growth again in the current quarter, but pronounced weakness in exports and imports says all there is to say about the US economy's momentum," said Sal Guatieri at BMO Capital Markets.

The politically sensitive trade shortfall with China, one of the United States' biggest trading partners, expanded to a record US$28.1 billion, bringing the year's 10-month total to US$245.5 billion.

The three-month average trade deficit rose to US$41.7 billion in October from US$41.5 billion in September.

- AFP/ir

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EC asks Centre to stop increase in cap on subsidized LPG cylinders

NEW DELHI: The Election Commission has written to the petroleum ministry directing that the move to raise LPG cylinder cap from six to nine cylinders a year, as reportedly announced by minister Veerappa Moily on Tuesday afternoon, be "stopped forthwith". It has also sought explanation from the minister on the alleged provocation for announcing the sop less than two days before polling for the first phase in Gujarat.

The minister has been asked to send in his reply by 11 am on Wednesday.

"It has come to the notice of the Commission from media reports quoting Moily, Union minister of petroleum and natural gas, that the Central government is increasing the supply of subsidized gas cylinders to each household from the present level of six cylinders to nine cylinders in a year," it was pointed in the letter signed by EC secretary Harbans Singh.

The Commission reminded the government that "the election process to the legislative assemblies of the states of Gujarat and Himachal Pradesh is currently on and the model code of conduct is in operation."

"The Commission has taken strong exception to your aforesaid announcement when the first phase of polling in the state of Gujarat is only two days away. The Commission has desired that you explain your above action at this juncture," the EC said in its letter to the minister.

Sources in the EC told TOI that the Commission would take action after examining the time when Moily reportedly announced the sop. In case it was done prior to 5 pm on Tuesday, it would invite a rap for violation of the mode code of conduct. However, it was made at 5 pm or later, it would invite action under Section 126 the Representation of People's Act, as it would be a violation of the ban on campaigning for 48 hours before the end of poll.

The first phase of polling in Gujarat is slated for December 13.

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Smokers celebrate as Wash. legalizes marijuana

SEATTLE (AP) — The crowds of happy people lighting joints under Seattle's Space Needle early Thursday morning with nary a police officer in sight bespoke the new reality: Marijuana is legal under Washington state law.

Hundreds gathered at Seattle Center for a New Year's Eve-style countdown to 12 a.m., when the legalization measure passed by voters last month took effect. When the clock struck, they cheered and sparked up in unison.

A few dozen people gathered on a sidewalk outside the north Seattle headquarters of the annual Hempfest celebration and did the same, offering joints to reporters and blowing smoke into television news cameras.

"I feel like a kid in a candy store!" shouted Hempfest volunteer Darby Hageman. "It's all becoming real now!"

Washington and Colorado became the first states to vote to decriminalize and regulate the possession of an ounce or less of marijuana by adults over 21. Both measures call for setting up state licensing schemes for pot growers, processors and retail stores. Colorado's law is set to take effect by Jan. 5.

Technically, Washington's new marijuana law still forbids smoking pot in public, which remains punishable by a fine, like drinking in public. But pot fans wanted a party, and Seattle police weren't about to write them any tickets.

In another sweeping change for Washington, Gov. Chris Gregoire on Wednesday signed into law a measure that legalizes same-sex marriage. The state joins several others that allow gay and lesbian couples to wed.

The mood was festive in Seattle as dozens of gay and lesbian couples got in line to pick up marriage licenses at the King County auditor's office early Thursday.

King County and Thurston County announced they would open their auditors' offices shortly after midnight Wednesday to accommodate those who wanted to be among the first to get their licenses.

Kelly Middleton and her partner Amanda Dollente got in line at 4 p.m. Wednesday.

Hours later, as the line grew, volunteers distributed roses and a group of men and women serenaded the waiting line to the tune of "Chapel of Love."

Because the state has a three-day waiting period, the earliest that weddings can take place is Sunday.

In dealing with marijuana, the Seattle Police Department told its 1,300 officers on Wednesday, just before legalization took hold, that until further notice they shall not issue citations for public marijuana use.

Officers will be advising people not to smoke in public, police spokesman Jonah Spangenthal-Lee wrote on the SPD Blotter. "The police department believes that, under state law, you may responsibly get baked, order some pizzas and enjoy a 'Lord of the Rings' marathon in the privacy of your own home, if you want to."

He offered a catchy new directive referring to the film "The Big Lebowski," popular with many marijuana fans: "The Dude abides, and says 'take it inside!'"

"This is a big day because all our lives we've been living under the iron curtain of prohibition," said Hempfest director Vivian McPeak. "The whole world sees that prohibition just took a body blow."

Washington's new law decriminalizes possession of up to an ounce for those over 21, but for now selling marijuana remains illegal. I-502 gives the state a year to come up with a system of state-licensed growers, processors and retail stores, with the marijuana taxed 25 percent at each stage. Analysts have estimated that a legal pot market could bring Washington hundreds of millions of dollars a year in new tax revenue for schools, health care and basic government functions.

But marijuana remains illegal under federal law. That means federal agents can still arrest people for it, and it's banned from federal properties, including military bases and national parks.

The Justice Department has not said whether it will sue to try to block the regulatory schemes in Washington and Colorado from taking effect.

"The department's responsibility to enforce the Controlled Substances Act remains unchanged," said a statement issued Wednesday by the Seattle U.S. attorney's office. "Neither states nor the executive branch can nullify a statute passed by Congress."

The legal question is whether the establishment of a regulated marijuana market would "frustrate the purpose" of the federal pot prohibition, and many constitutional law scholars say it very likely would.

That leaves the political question of whether the administration wants to try to block the regulatory system, even though it would remain legal to possess up to an ounce of marijuana.

Alison Holcomb is the drug policy director of the American Civil Liberties Union of Washington and served as the campaign manager for New Approach Washington, which led the legalization drive. She said the voters clearly showed they're done with marijuana prohibition.

"New Approach Washington sponsors and the ACLU look forward to working with state and federal officials and to ensure the law is fully and fairly implemented," she said.

___

Johnson can be reached at https://twitter.com/GeneAPseattle

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Royal Hoax: DJs 'Shattered' After Nurse's Suicide

The two Australian radio DJs who prank-called the London hospital where Kate Middleton was being treated last week said they were "shattered" and "gutted" after the nurse who answered their call apparently killed herself.

Shock jocks Mel Greig, 30, and Michael Christian, 25, cried as they spoke to Australia's Channel 9 overnight in their first public interview since Jacintha Saldanha, 46, the nurse who last week connected the pair to the duchess' room, was found dead Friday morning.

"I'm shattered, gutted, heartbroken," Christian said. "Mel and myself are incredibly sorry for the situation and what's happened. I had the idea. … It was just a simple harmless phone call. It was going to go on for 30 seconds. We were going to get hung up on."

FULL COVERAGE: Royal Baby

The host of the "2Day" FM radio show pretended to be Queen Elizabeth and Prince Charles, asking for an update on Middleton's condition when they called up King Edward VII Hospital in central London. With no receptionist on duty overnight, Saldanha answered the prank call and put it through.

"It was just something that was fun and light-hearted and a tragic turn of events that I don't think anyone had expected," Christian said.

A Current Affair/ABC News

Jacintha Saldanha Dead: Could DJs Face Charges? Watch Video

Jacintha Saldanha Outrage: DJs Responsible for Prank Are in Hiding Watch Video

Saldanha was found dead Friday morning after police were called to an address near the hospital to "reports of a woman found unconscious," according to a statement from Scotland Yard.

Investigators have not said how she might have killed herself.

Greig cried today when asked about the moment she heard of the death of Saldanha, a mother of two.

"It was the worst phone call I've ever had in my life," she said through tears. "There's not a minute that goes by that we don't think about her family and the thought that we may have played a part in that is gut-wrenching."

The DJs said they never expected to get through to Middleton's nurse and assumed "the same phone calls had been made 100 times that morning," Christian said.

Grieg said, "We wanted to be hung up on with our silly voices and wanted a 20-second segment to air of us doing stupid voice. … Not for a second did we expect to even speak to Kate or even have a conversation with anyone at the hospital. We wanted to be hung up on."

The global backlash against the duo has been fierce, from online death threats to calls for prison time. Their radio station has announced it is banning phony phone calls altogether, and suspending advertising indefinitely.

Max Moore-Wilton, the chairman of Southern Cross Austereo, said in a letter Sunday to Lord Glenarthur, chairman of King Edward VII's Hospital, that the company is reviewing the station's broadcast policies, the AP reported.

"I can assure you we are taking immediate action and reviewing the broadcast and processes involved," Moore-Wilton said in the letter. "As we have said in our own statements on the matter, the outcome was unforeseeable and very regrettable."

Greig and Michael have been taken off the air, silenced indefinitely.

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Egypt army gets temporary power to arrest civilians

CAIRO (Reuters) - Egypt's government has temporarily given the military the authority to arrest civilians to help safeguard a constitutional referendum planned for Saturday, the official gazette said.

The order, gazetted late on Sunday, said the military would support police and liaise with them to protect "vital institutions" until the referendum result is declared.

The decree gave army officers the right to make arrests and transfer detainees to prosecutors.

Despite its limited nature, the edict will revive memories of Hosni Mubarak's emergency law, also introduced as a temporary expedient, under which military or state security courts tried thousands of political dissidents and Islamist militants.

But a military source stressed that the measure, introduced by a civilian government, would have a short shelf-life.

"The latest law giving the armed forces the right to arrest anyone involved in illegal actions such as burning buildings or damaging public sites is to ensure security during the referendum only," the military source said.

"The armed forces secured polling stations during previous elections when it was in charge of the country," the source said, referring to 16 months of army rule after Mubarak fell.

"Now the president is in charge. In order for the armed forces to be involved in securing the referendum, a law had to be issued saying so," the source added.

Presidential spokesman Yasser Ali said the committee overseeing the vote had requested the army's assistance.

"The armed forces will work within a legal framework to secure the referendum and will return (to barracks) as soon as the referendum is over," Ali said.

On Saturday, the military urged rival political forces to solve their disputes via dialogue and said the opposite would drag the country into a "dark tunnel", which it would not allow.

A statement issued by the military spokesman and read on state radio and television made no mention of President Mohamed Mursi, but said a solution to the political crisis should not contradict "legitimacy and the rules of democracy".

A military source close to top officers said the statement "does not indicate any future intervention in politics".

A military council took over after a popular revolt ended Mubarak's 30 years of army-backed rule last year. It then handed power to Mursi, who became Egypt's first freely elected leader in June. The military has not intervened in the latest crisis.

The army statement said the military's duty was to protect national interests and secure vital state institutions.

"The armed forces affirm that dialogue is the best and only way to reach consensus," it added. "The opposite of that will bring us to a dark tunnel that will result in catastrophe and that is something we will not allow."

Hassan Abu Taleb of the Al Ahram Center for Political and Strategic Studies said Saturday's army statement suggested the military wanted both sides to talk out their differences, but discounted the chance of direct military intervention.

"They realize that interfering again in a situation of civil combat will squeeze them between two rocks," he said.

(Additional reporting by Yasmine Saleh; Writing by Alistair Lyon; editing by Philippa Fletcher)

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SAF serviceman injured onboard ship berthed at Changi Naval Base

SINGAPORE: A Singapore Armed Forces (SAF) regular serviceman has been critically injured while onboard the Landing Ships Tank RSS Endeavour, which is berthed at Changi Naval Base.

29-year-old ME2 Chee Weng Fai Jason, a Weapon Systems Supervisor, was checking on a berthing rope that was being tightened on Monday afternoon when he got caught between a motorised winch and the rope, said the Ministry of Defence (MINDEF).

The base's medical centre was alerted to the incident at 2.25pm and attended to Mr Chee within five minutes, said the ministry.

According to a statement from MINDEF, Mr Chee was attended to by a medical team led by four medical officers from the Changi Naval Medical Centre, who stabilised his condition before Mr Chee was sent via an SAF ambulance from the RSS Endeavour to Changi General Hospital.

Mr Chee has undergone emergency surgery and remains in critical condition.

The SAF is conducting an investigation to determine the cause of the incident.

- CNA/jc

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Wal-Mart lobbying creates storm, company denies illegality

NEW DELHI: The issue of Wal-Mart lobbying today led to a political storm with opposition creating pandemonium in the Rajya Sabha and promising to create further trouble on Tuesday by pressing its demand for a probe and a statement by Prime Minister Manmohan Singh.

BJP, CPM, CPI, SP, JD(U), Trinamool Congress, AGP and AIADMK used the issue to target the government over its decision to allow 51% FDI in retail.

These parties created ruckus in the Rajya Sabha soon after the Question Hour, alleging that the US giant had indulged in corruption to enter Indian market. The uproar led to three adjournments till 2 PM when the House was adjourned finally for the day.

Though the issue did not figure in the Lok Sabha today, the Opposition has decided to rake it up there tomorrow.

"It is a very serious issue. It has been raised in Rajya Sabha today. We propose to raise it in Lok Sabha tomorrow," senior BJP leader Yashwant Sinha told reporters.

When pointed out that lobbying is not illegal in the US, the former external affairs minister said, "I know it is allowed in the US. But the laws of the two countries are different. Lobbying in the US does not mean corruption but in India, it does. That is the difference. There is illegality."

Earlier, Ravishankar Prasad (BJP) raised the issue in the Rajya Sabha during the Zero Hour. He said apprehensions were raised earlier also about Wal-Mart spending huge money to lobby for entering the Indian market and that it has now been proved true. He was supported by members of other opposition parties.

Bharti Wal-Mart issued a statement, saying the opposition allegations of corruption are "entirely false". It said the amount mentioned in its disclosure is a "compilation of expenses associated with staff, association dues, consultants and contributions spent in the US."

The Wal-Mart lobbying issue brought back into focus the decision on FDI with Opposition uniting even as motions brought by it got defeated in both Houses last week with government securing numbers with the help of BSP and SP.

Prasad said that Wal-Mart has in its lobbying disclosure report to the US Senate said it has spent Rs 125 crore on lobbying and $ 3 million have been spent in 2012 itself for entering the Indian market.

"Lobbying is illegal in India. Lobbying is a kind of bribe. If Wal-Mart has said that hundreds of crores of rupees were spent in India, then it is a kind of bribe. Government should tell who was given this bribe. This raises a question mark on the implementation of FDI in retail," he said.

The BJP leader was supported by TMC leader D Bandopadhyay who waved a newspaper report and CPM member P Rajeeve who demanded an "independent inquiry" into the whole episode alleging that there are some reports saying Wal-Mart invested money even before Fema was amended.

"This is bribery," he said as the Opposition members shouted slogans in favour of withdrawing FDI.

Amid din, SP members trooped into the Well shouting slogans against the government's move to bring reservation in promotion for SCs/STs. Government has listed the Constitution (117th Amendment) Bill, 2012 for this purpose in the House.

Earlier, minister of state for parliamentary affairs Rajiv Shukla assured the members that he would bring the matter to the notice of the minister concerned. This was, however, rejected by the opposition which insisted on a response from the Prime Minister.

T Siva (DMK) was also on his feet. Minister of state in PMO V Narayanasamy was heard saying "what more they (the Opposition) want, when he (Shukla) has said that he will bring it to the notice of the minister concerned". While BSP members kept seated, those from SP were on their feet joining the issue with BJP and Left.

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Smokers celebrate as Wash. legalizes marijuana

SEATTLE (AP) — The crowds of happy people lighting joints under Seattle's Space Needle early Thursday morning with nary a police officer in sight bespoke the new reality: Marijuana is legal under Washington state law.

Hundreds gathered at Seattle Center for a New Year's Eve-style countdown to 12 a.m., when the legalization measure passed by voters last month took effect. When the clock struck, they cheered and sparked up in unison.

A few dozen people gathered on a sidewalk outside the north Seattle headquarters of the annual Hempfest celebration and did the same, offering joints to reporters and blowing smoke into television news cameras.

"I feel like a kid in a candy store!" shouted Hempfest volunteer Darby Hageman. "It's all becoming real now!"

Washington and Colorado became the first states to vote to decriminalize and regulate the possession of an ounce or less of marijuana by adults over 21. Both measures call for setting up state licensing schemes for pot growers, processors and retail stores. Colorado's law is set to take effect by Jan. 5.

Technically, Washington's new marijuana law still forbids smoking pot in public, which remains punishable by a fine, like drinking in public. But pot fans wanted a party, and Seattle police weren't about to write them any tickets.

In another sweeping change for Washington, Gov. Chris Gregoire on Wednesday signed into law a measure that legalizes same-sex marriage. The state joins several others that allow gay and lesbian couples to wed.

The mood was festive in Seattle as dozens of gay and lesbian couples got in line to pick up marriage licenses at the King County auditor's office early Thursday.

King County and Thurston County announced they would open their auditors' offices shortly after midnight Wednesday to accommodate those who wanted to be among the first to get their licenses.

Kelly Middleton and her partner Amanda Dollente got in line at 4 p.m. Wednesday.

Hours later, as the line grew, volunteers distributed roses and a group of men and women serenaded the waiting line to the tune of "Chapel of Love."

Because the state has a three-day waiting period, the earliest that weddings can take place is Sunday.

In dealing with marijuana, the Seattle Police Department told its 1,300 officers on Wednesday, just before legalization took hold, that until further notice they shall not issue citations for public marijuana use.

Officers will be advising people not to smoke in public, police spokesman Jonah Spangenthal-Lee wrote on the SPD Blotter. "The police department believes that, under state law, you may responsibly get baked, order some pizzas and enjoy a 'Lord of the Rings' marathon in the privacy of your own home, if you want to."

He offered a catchy new directive referring to the film "The Big Lebowski," popular with many marijuana fans: "The Dude abides, and says 'take it inside!'"

"This is a big day because all our lives we've been living under the iron curtain of prohibition," said Hempfest director Vivian McPeak. "The whole world sees that prohibition just took a body blow."

Washington's new law decriminalizes possession of up to an ounce for those over 21, but for now selling marijuana remains illegal. I-502 gives the state a year to come up with a system of state-licensed growers, processors and retail stores, with the marijuana taxed 25 percent at each stage. Analysts have estimated that a legal pot market could bring Washington hundreds of millions of dollars a year in new tax revenue for schools, health care and basic government functions.

But marijuana remains illegal under federal law. That means federal agents can still arrest people for it, and it's banned from federal properties, including military bases and national parks.

The Justice Department has not said whether it will sue to try to block the regulatory schemes in Washington and Colorado from taking effect.

"The department's responsibility to enforce the Controlled Substances Act remains unchanged," said a statement issued Wednesday by the Seattle U.S. attorney's office. "Neither states nor the executive branch can nullify a statute passed by Congress."

The legal question is whether the establishment of a regulated marijuana market would "frustrate the purpose" of the federal pot prohibition, and many constitutional law scholars say it very likely would.

That leaves the political question of whether the administration wants to try to block the regulatory system, even though it would remain legal to possess up to an ounce of marijuana.

Alison Holcomb is the drug policy director of the American Civil Liberties Union of Washington and served as the campaign manager for New Approach Washington, which led the legalization drive. She said the voters clearly showed they're done with marijuana prohibition.

"New Approach Washington sponsors and the ACLU look forward to working with state and federal officials and to ensure the law is fully and fairly implemented," she said.

___

Johnson can be reached at https://twitter.com/GeneAPseattle

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