Ground Zero Volunteers Face Obstacles to Compensation

On the day the terrorists flew into the World Trade Center, the Wu-Tang Clan canceled its meeting with a record mixer named Richard Oliver, so Mr. Oliver rushed downtown from his Hell’s Kitchen apartment to help out.

He said he spent three sleepless days at ground zero, tossing body bags. “Then I went home, ate, crashed, woke up,” he said. He had left his Dr. Martens boots on the landing outside his apartment, where he said they “had rotted away.”

“That was kind of frightening,” he continued. “I was breathing that stuff.”

After the Sept. 11 attacks, nothing symbolized the city’s rallying around like many New Yorkers who helped at ground zero for days, weeks, months, without being asked. Now Mr. Oliver, suffering from back pain and a chronic sinus infection, is among scores of volunteers who have begun filing claims for compensation from a $2.8 billion fund that Congress created in 2010.

But proving they were there and eligible for the money is turning out to be its own forbidding task.

The other large classes of people who qualify — firefighters, police officers, contractors, city workers, residents and students — have it relatively simple, since they are more likely to have official work orders, attendance records and leases to back them up. But more than a decade later, many volunteers have only the sketchiest proof that they are eligible for the fund, which is expected to make its first awards early this year. (A separate $1.5 billion treatment fund also was created.)

They are volunteers like Terry Graves, now ill with lung cancer, who kept a few business cards of people she worked with until 2007, then threw them away. Or Jaime Hazan, a former Web designer with gastric reflux, chronically inflamed sinuses and asthma, who managed to dig up a photograph of himself at ground zero — taken from behind.

Or Mr. Oliver, who has a terse two-sentence thank-you note on American Red Cross letterhead, dated 2004, which does not meet the requirement that it be witnessed or sworn.

“For some people, there’s great records,” said Noah H. Kushlefsky, whose law firm, Kreindler & Kreindler, is representing volunteers and others who expect to make claims. “But in some respects, it was a little bit of a free-for-all. Other people went down there and joined the bucket brigade, talked their way in. It’s going to be harder for those people, and we do have clients like that.”

As documentation, the fund requires volunteers to have orders, instructions or confirmation of tasks they performed, or medical records created during the time they were in what is being called the exposure zone, including the area south of Canal Street, and areas where debris was being taken.

Failing that, it will be enough to submit two sworn statements — meaning the writer swears to its truth, under penalty of perjury — from witnesses describing when the volunteers were there and what they were doing.

Proving presence at the site might actually be harder than proving the illness is related to Sept. 11, since the rules now allow a host of ailments to be covered, including 50 kinds of cancer, despite an absence of evidence linking cancer to ground zero.

A study by the New York City health department, just published in the Journal of the American Medical Association, found no clear association between cancer and Sept. 11, though the researchers noted that some cancers take many years to develop.

Unlike the original compensation fund, administered by Kenneth Feinberg, which dealt mainly with people who were killed or maimed in the attack, “This one is dealing with injuries that are very common,” said Sheila L. Birnbaum, a former mediator and personal injury defense lawyer, who is in charge of the new fund. “So it’s sort of a very hard process from the fund’s point of view to make the right call, and it requires some evidence that people were actually there.”

Asked how closely the fund would scrutinize documents like sworn statements, Ms. Birnbaum said she understood how hard it was to recreate records after a decade, and was going on the basic assumption that people would be honest.

In his career as a record mixer, Mr. Oliver, 56, has been associated with 7 platinum and 11 gold records, and 2 Grammy credits, which now line the walls of his condominium in College Point, Queens. He said he first got wind of the Sept. 11 attacks from a client, the Wu-Tang Clan. “One of the main guys called me: ‘Did you see what’s on TV? Because our meeting ain’t going to happen,’ ” he recalled.

Having taken a hazmat course after high school, he called the Red Cross and was told they needed people like him. “I left my soon-to-be-ex-wife and 1-year-old son and went down,” he said. “I came back three days later,” after surviving on his own adrenaline, Little Debbie cakes handed out to volunteers and bottled water. After working for three days setting up a morgue, he was willing to go back, he said, but “they said we have trained people now, thank you very much for your service.”

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The 'fiscal cliff' con game

Whatever the ultimate shape of the "fiscal cliff" solution that has preoccupied all Washington, and a fair swath of the rest of country, in the final days of 2012 and into the new year, Americans of all walks of life should be asking themselves this question: How do we like being conned?

The deal, passed by the Senate on New Year's morning, was made final late Tuesday when the House of Representatives signed on. Its essential elements include expiration of the President George W. Bush-era income and capital gains tax cuts on couples' incomes over $450,000, and a modest increase in the estate tax.

Unemployment benefits and tax credits for lower-income families will be extended. The payroll tax holiday that replaced a low- and middle-income tax credit in 2009 will end, but the tax credit won't return. Many other items, including the fate of automatic spending cuts mandated by the 2011 debt-ceiling deal, are being put off for weeks or months. Another debt-ceiling fight looms on the near horizon.

Almost everything mentioned above involves a con game of one sort or another, because almost none of it is what it seems on the surface. Since such fakery is certain to continue well into the new year, here's a quick guide to its basic features.

The deficit con: The big daddy. Despite the lawmakers' claims that the debate has been about closing the federal deficit and reducing the federal debt, none of the negotiating over the past weeks has dealt with those issues. Indeed, the tax and spending package will widen the deficit by some $4 trillion over 10 years, compared with what would happen if the tax increases and spending cuts mandated by existing law were implemented.

The House Republican caucus has consistently looked for ways to protect high-income taxpayers from a tax increase, at the expense of beneficiaries of government programs such as enrollees in Social Security and Medicare. If there's a dominant preoccupation with cutting the deficit lurking somewhere in that mind-set, good luck finding it.

The shared sacrifice con: If the goal has been for an approach to deficit cutting balanced among economic strata — and Democrats and Republicans both pay lip service to this notion — then the final deal is a fraud. Every working person earning up to $113,700 in wages this year will shoulder an instant tax increase of 2%. That's because the payroll tax holiday enacted in 2010 is expiring.

The tax holiday, which cut the employee's share of the Social Security tax to 4.2% from 6.2% of income up to the annual wage cap, was always designed as a temporary stimulus measure. But few people expected that it would expire at a single stroke — and without a countervailing working-class tax credit to soften the blow.

Monkeying with the payroll tax was never a great idea, because it undermined Social Security's essential funding mechanism. But what's often forgotten is that the holiday was implemented to replace an existing tax break for the middle class — the Making Work Pay credit—opposed by the GOP. But the credit isn't coming back, so the end of the holiday means a pure tax increase on the 98% of working Americans earning $113,700 or less in wages. For a couple touching, say, $80,000, the increase will come to $1,600.

Quiz: How much do you know about the "fiscal cliff?"

Compare that with the break reaped by taxpayers declaring income in the $250,000 to $450,000 range. That's the difference between the threshold at which President Obama proposed restoring pre-Bush tax rates and the level enacted by Congress. Exempting that slice of income from higher taxes saves up to $9,200 in taxes for families earning $450,000 or more (depending on the cost of phaseouts of exemptions and deductions for those taxpayers).

The estate tax con: There's no purer giveaway to the wealthy than this. The final deal raises the tax to 40% from 35% on estates over $10 million. (That figure is for couples, whose estates are each entitled to a $5-million exemption upon their deaths.) The alternative was to return to 2009 law, which set the tax at 45% on couples' estates more than $7 million.

Who pays the estate tax? In 2011, about 1,800 taxpayers died leaving estates of more than $10 million. Their average estate was somewhere from $30 million to $40 million. Their heirs cashed in on some of the most nimble tax planning on Earth: Although the statutory top rate was 35%, the average rate on estates of even $20 million-plus (the average gross value of which was $65 million) came to only 16.2%.

Estate tax bonus babies long have been protected by the myth that the tax falls heavily, and unjustly, on small family farms and businesses. The Washington-based Tax Policy Center found, however, that fewer than 50 small farms and businesses paid any estate tax in 2011. Their liability came to less than one-tenth of 1% of the total collected. On the other hand, more than 50% of the estate tax was paid by people whose income placed them in the top tenth of 1% of all taxpayers. These are the people protected by estate tax opponents.

The debt ceiling con: The original of this con is what put us at the fiscal cliff in the first place, for the automated spending cuts being dealt with now were put in place as the GOP's price to raise the federal debt ceiling and stave off a government default in 2011. The debt ceiling was not designed as a constraint when it was created in 1917 — it was convenient blanket authority for the Treasury to issue debt so that Congress wouldn't have to vote permission each time a new bond had to be floated.

Approval was always routine — the limit was raised 91 times between 1960 and the showdown in 2011. Now it's a hostage-taking situation, destined to return in the next month or two when Republicans who didn't get what they wanted in this week's cliffhanger menace the creditworthiness of the U.S. again.

For a brief shining moment, President Obama dreamed of folding an end to the debt limit into a fiscal cliff deal, but that didn't happen. The idea that the debt limit discourages fiscal irresponsibility is a scream. It doesn't now, and never has, stopped Congress from enacting any spending plan or tax break it pleases, creating a budget demand that has to be paid for with, yes, debt. If Congress wants less debt, it can cut spending or raise taxes. The debt limit is a dangerous weapon in the hands of irresponsible legislators, and it's time to take it out of their hands.

The bond vigilante con: This is the bedrock con that fuels deficit hawkishness. The idea is that if America doesn't get its debt under control, it will be punished by unhappy bond investors worldwide. U.S. interest rates will soar and the standard of living will plunge.

This con depends on voters overlooking that it hasn't happened. U.S. government bonds remain the most sought-after in the world. Remember August 2011, when Standard & Poor's cut America's credit rating because of poor fiscal policy and dysfunctional government? Neither condition has improved, but the yield on the 30-year Treasury bond has fallen from 3.75% to 2.82%, and on the 10-year note from 2.14% to 1.68%.

The bogeymen of higher interest rates and inflation that are supposed to follow inevitably from our current level of deficit spending have simply not materialized, and aren't visible on the horizon. Moreover, history suggests that more typically they're responses to vigorous economic growth, not to policies aimed at reviving recovery.

That's a clue that the whole fiscal cliff affair is a major con. There is no reason for the country to suffer now the austerity embodied in the spending cuts and tax hikes that were to come due Jan. 1; what's needed is continued stimulus to complete the economic recovery. Indeed, the starkness of the Jan. 1 deadline is itself a con — nothing except its own inaction prevents Congress from temporarily moderating the effects of the cliff by voting to defer tax increases and spending cuts, as it did this week.

In the golden age of individualistic rural America so beloved of today's conservative dreamers, people who perpetrated cons such as these would be tarred, feathered and ridden into the sunset on a rail. Today we allow them to set the agenda in Washington. Is that supposed to be progress?

Michael Hiltzik's column appears Sundays and Wednesdays. Reach him at mhiltzik@latimes.com, read past columns at latimes.com/hiltzik, check out facebook.com/hiltzik and follow @latimeshiltzik on Twitter.

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USC's dreadful performance is perfect way to conclude imperfect season

EL PASO — A football season that once swaggered through the warmth of a No. 1 ranking has curled up and expired in a cold, remote desert, buffeted by a chilled and foreboding wind.

The kid coach is bundled in a black hoodie and wearing sunglasses. He is standing 10 yards from most of his team. He is hunched over a play card, huddled into himself, alone.

The kid quarterback is battered by the wind, perplexed by the defense and wandering the sidelines looking for comfort or instruction. He receives neither and wanders alone.

The athletic director who has said he is "150%" behind this mess is on speed dial, but he cannot be reached for comment, which could mean nothing or everything. In offering his unwavering and unconditional support of the most underachieving team in college football history, he, too, could be alone.

Happy New Year's Eve, USC football fans. Are you ready for the mother of all hangovers?

Playing a losing team from a weakened conference in a secondary bowl game Monday, the Trojans did worse than simply lose. They didn't even show up.

In a 21-7 loss to Georgia Tech, Coach Lane Kiffin was distant, quarterback Max Wittek was despairing, the defense was battered for nearly 300 rushing yards, and even their scarf-swaddled fans finally had enough. In the final minutes of the game, Trojans fans rained boos down upon Georgia Tech for having the nerve to call timeout and extend their agony.

This wasn't just one bad game; this was the end of a season filled with bad games, the last milepost in arguably the most unsightly journey ever taken by a football team in NCAA history.

The Trojans went from No. 1 in the country to out of the rankings entirely, the first time this has happened in 48 years. The Trojans went from talk of an undefeated season to six losses, including five in the last six games. The Trojans went from Hollywood to El Paso to a tiny Sun Bowl conference room in which Kiffin tried to explain it all.

"A very surprising day," he said. "Obviously, it starts with the head coach."

Many believe this should be the end of the head coach. Even though Athletic Director Pat Haden assured me on Nov. 17 that Kiffin was returning next season and that he was "150%" behind the coach, many think he could and should change his mind.

Since that statement — oddly coming on the day of the loss to UCLA — the Trojans suffered through questionable play-calling in a loss to Notre Dame and then experienced an awful week here. Georgia Tech walked out of a Sun Bowl banquet because the Trojans showed up late, two Trojans tweeted nasty things about the city of El Paso, and even a giant Trojans thank-you ad purchased for the back page of the sports section of the El Paso Times couldn't fully make amends.

Although USC claimed bowl officials knew about its late banquet arrival, and although USC players aren't the first kids to tweet dumb things, there are no easy explanations about what happened in the week's culminating event. How on earth does a Trojans team supposedly loaded with NFL prospects gain only 205 total yards against a Georgia Tech team that gave up 510 yards to Middle Tennessee State? Or have only two more first downs than punts? Or commit three turnovers, giving them 34 for the season, the most ever for a team with a winning record?

"We had two great weeks of practice. ... I thought our guys were really into it," said Kiffin, shaking his head, showing again the apparent fraying in his connection with his team.

Kiffin later said he was huddled under the hoodie because he didn't want to wear a ski cap. He also said he was wearing sunglasses to hide a tiny bandage, which he said was covering a scrape caused by some horsing around with linebacker Hayes Pullard.

"C'mon, you know that how I looked is not the reason we lost this game," he said.

But all of it contributed to the perception of a coach who is not a strong leader, which is another reason Haden could ultimately change his mind and make a change. This lack of leadership spread to his players, even quarterback Matt Barkley, who began the season as a Heisman Trophy favorite and ended it as a no-show.

Yes, Barkley's season ended when he suffered a sprained shoulder against UCLA. But where was the quarterback on the sidelines Monday when Wittek could have used his counsel? Where was any veteran to support the redshirt freshman when he was clearly lost while completing 14 of 37 passes for 107 yards with one touchdown and three interceptions? And where were the veterans at the start of the fourth quarter, with the Trojans still trailing by only a touchdown, when USC trudged down the field while the Yellow Jackets bounced and danced in unified excitement?

"I never saw this coming," said senior defensive end Wes Horton. "With the talent and coaches we had, I thought we'd have a much better record."

Statements like that, and games like this, are all damning to Kiffin's cause. But remember, the two things that Haden said he liked about Kiffin are still true. Haden said he loves Kiffin's commitment to academics, and two Trojans were sent home from El Paso for academic reasons. Haden also said he loves Kiffin's recruiting, and the Trojans are still scheduled to have one of the nation's top hauls.

"We'll sign the No. 1 class in the country and go back to work," Kiffin said.

For now, that is true, and I wouldn't be surprised if it remained true. But I also wouldn't be surprised if Haden suddenly changes his mind and changes everything. By now, all shock has been drained from college football's most stunning team, its season ending Monday in the chilliest and most desperate of climes, with an embarrassing loss that was no surprise to anybody.

bill.plaschke@latimes.com

twitter.com/billplaschke

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DiDonato a luminous Mary Stuart at Met

NEW YORK (AP) — The Metropolitan Opera may have pretty much turned opening night over to the glamorous Anna Netrebko, but New Year's Eve belongs to a very different diva — Joyce DiDonato.

Last year the Kansas-born mezzo-soprano headlined a starry lineup in the baroque pastiche "The Enchanted Island." On Monday night she brought a gala audience to its feet with a luminous performance in the title role of Donizetti's "Maria Stuarda."

Never before performed at the Met, this second opera in the composer's so-called "Three Queens" trilogy portrays the lethal conflict between Mary, deposed queen of Scotland, and Queen Elizabeth I of England.

From the moment she makes her entrance in the second scene, singing of her joy in strolling outside her prison in Fotheringay Castle, DiDonato rivets attention. She imbues every syllable with a concentrated eloquence that makes her compact voice seem larger than it is. She displays seemingly effortless command of coloratura embellishments throughout a wide vocal range. And she is equally impressive in fiery outbursts and in hushed, long-held phrases — like the ones she spun out as she sang through the chorus in the final scene.

The opera's dramatic heart is a confrontation between the two queens that never took place in history but that figures in the Friedrich Schiller play on which the libretto is based. Mary at first abases herself in hope of winning a pardon; then, as Elizabeth hurls insults, her pride reasserts itself and she seals her doom by denouncing her rival as "figlia impura di Bolena" ("impure daughter of Ann Boleyn") and "vil bastarda" ("vile bastard").

DiDonato was impressive in this scene when she sang the role for the first time last spring in Houston, but her performance Monday night was even better — more confident and more filled with vocal and dramatic shadings. There was a wonderful touch when, after she had spent her fury, she allowed herself a beatific smile, as if to convey: "There! I said it and I'm glad!"

Of course, it takes two to stage a confrontation, and DiDonato's partner at the Met is Elza van den Heever, a South African soprano making her debut. She has a voice that's impressive in many respects, with a large and vibrant upper register. But she tended to fade out in the lower part of her range, where much of Elizabeth's music lies.

More damagingly, she was victimized by a quirk of David McVicar's production that has Elizabeth lurching awkwardly about the stage for much of the evening, as if thrown off balance by John Macfarlane's elaborate period costumes. Perhaps this bizarre gait is intended to contrast with Mary's immaculate poise, but it mainly proves distracting.

The opening scene in Elizabeth's palace is garishly staged, with what look like red rafters hanging down from the ceiling and gratuitous acrobats in devil costumes, but once past this, matters improve. For the scene outside Fotheringay, Macfarlane fills the stage with spindly trees barren of leaves and provides a painted backdrop that evokes a cloudy landscape. The final tableau is also striking: Mary, shorn of her long hair and wearing a simple red dress, climbs a staircase with her back to the audience to meet her executioner and the chopping block.

Though the two queens dominate the opera, there are some other characters, and they are all in extremely good hands. Having the elegant tenor Matthew Polenzani take on the thankless role of the ineffectual Leicester is luxury casting indeed. Bass Matthew Rose is warmly sympathetic as Mary's confessor, Talbot; baritone Joshua Hopkins sings with robust tone as her nemesis, Cecil; and mezzo Maria Zifchak lends her customary strong support as Mary's attendant, Anna.

Maurizio Benini conducts a lithe and lively performance of the score, even if he can't quite disguise the fact that the second half of the opera is decidedly anti-climactic.

There are seven more performances, including a matinee on Saturday, Jan. 19, that will be broadcast live in HD to movie theaters around the world.

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Employers Must Offer Family Health Care, Affordable or Not, Administration Says

WASHINGTON — In a long-awaited interpretation of the new health care law, the Obama administration said Monday that employers must offer health insurance to employees and their children, but will not be subject to any penalties if family coverage is unaffordable to workers.

The requirement for employers to provide health benefits to employees is a cornerstone of the new law, but the new rules proposed by the Internal Revenue Service said that employers’ obligation was to provide affordable insurance to cover their full-time employees. The rules offer no guarantee of affordable insurance for a worker’s children or spouse. To avoid a possible tax penalty, the government said, employers with 50 or more full-time employees must offer affordable coverage to those employees. But, it said, the meaning of “affordable” depends entirely on the cost of individual coverage for the employee, what the worker would pay for “self-only coverage.”

The new rules, to be published in the Federal Register, create a strong incentive for employers to put money into insurance for their employees rather than dependents. It is unclear whether the spouse and children of an employee will be able to obtain federal subsidies to help them buy coverage — separate from the employee — through insurance exchanges being established in every state. The administration explicitly reserved judgment on that question, which could affect millions of people in families with low and moderate incomes.

Many employers provide family coverage to full-time employees, but many do not. Family coverage is much more expensive, and the employee’s share of the premium is typically much larger.

In 2012, according to an annual survey by the Kaiser Family Foundation, premiums for employer-sponsored health insurance averaged $5,615 a year for single coverage and $15,745 for family coverage. The employee’s share of the premium averaged $951 for individual coverage and more than four times as much, $4,316, for family coverage.

Starting in 2014, most Americans will be required to have health insurance. Low- and middle-income people can get tax credits to help pay their premiums, unless they have access to affordable coverage from an employer.

In its proposal, the Internal Revenue Service said, “Coverage for an employee under an employer-sponsored plan is affordable if the employee’s required contribution for self-only coverage does not exceed 9.5 percent of the employee’s household income.”

The rules, though labeled a proposal, are more significant than most proposed regulations. The Internal Revenue Service said employers could rely on them in making plans for 2014.

In writing the law, members of Congress often conjured up a picture of employees working year-round at full-time jobs. But in drafting the rules, the I.R.S. wrestled with the complex reality of part-time, seasonal and temporary workers.

In addition, the administration expressed concern that some employers might try to evade the new requirements by firing and rehiring employees, manipulating their work hours or using temporary staffing agencies. The rules include several provisions to prevent such abuse.

The law says an employer with 50 or more full-time employees may be subject to a tax penalty if it fails to offer coverage to “its full-time employees (and their dependents).”

Employers asked for guidance, and the Obama administration provided it, saying that a dependent is an employee’s child under the age of 26.

“Dependent does not include the spouse of an employee,” the proposed rules say.

Thus, employers must offer coverage to children of an employee, but do not have to make it affordable. And they do not have to offer coverage at all to the spouse of an employee.

The administration said that the rules — which apply to private businesses, nonprofit organizations and state and local government agencies — would require changes at many work sites.

“A number of employers currently offer coverage only to their employees, and not to dependents,” the I.R.S. said. “For these employers, expanding their health plans to add dependent coverage will require substantial revisions to their plans.”

In view of this challenge, the agency said it would grant a one-time reprieve to employers who fail to offer coverage to dependents of full-time employees, provided they take steps in 2014 to come into compliance. Under the rules, employers must offer coverage to employees in 2014 and must offer coverage to dependents as well, starting in 2015.

The new rules apply to employers that have at least 50 full-time employees or an equivalent combination of full-time and part-time employees. A full-time employee is a person employed on average at least 30 hours a week. And 100 half-time employees are considered equivalent to 50 full-time employees.

Thus, the government said, an employer will be subject to the new requirement if it has 40 full-time employees working 30 hours a week and 20 half-time employees working 15 hours a week.

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California regulators seek to police out-of-state pharmacies

SACRAMENTO — State regulators are responding to a deadly nationwide meningitis outbreak linked to contaminated drugs by seeking new power to inspect out-of-state pharmacies that sell special-order prescription drugs in California.

In September, the New England Compounding Center in Framingham, Mass., sent three shipments of contaminated injectable steroid solutions to 76 healthcare facilities and pain-control clinics in 23 states, including four in California.

These customized drugs, which were injected into patients' spines and joints, caused 39 deaths among 620 reported cases of fungal meningitis and other infections, according to a Dec. 17 report from the federal Centers for Disease Control and Prevention in Atlanta.

The steroids were recalled by the now-bankrupt firm before they caused any deaths or illnesses in California. But that fortunate outcome hasn't kept the California Board of Pharmacy from being more aggressive about policing sometimes poorly regulated pharmacies that produce and ship large volumes of these medications, known as compounded drugs.

At issue is whether these outfits ought to be regulated by the U.S. Food and Drug Administration. The FDA regulates large drug manufacturers, but its legal authority to oversee the compounding pharmacies has been disputed in the courts. As a result, states are moving to play a bigger role in ensuring the safety of their products.

In one such case in 2012, the now-defunct Franck's Compounding Pharmacy in Ocala, Fla., shipped supposedly sterile products for injecting into the eye that caused infections in 17 California surgery patients.

The state pharmacy board, which oversees and licenses nearly 7,000 drugstores in California, plans to sponsor a bill in the Legislature this year that would give state agents the authority to make unannounced on-site inspections of out-of-state pharmacies that the board licenses to ship sterile medicines, such as injectable steroids, eyedrops and inhaled aerosol drugs, to healthcare providers here.

The California initiative is getting preliminary support from two industry trade groups, the Pharmacy Compounding Accreditation Board and the International Academy of Compounding Pharmacies. The FDA also is supportive of the thrust of the proposed legislation, said Virginia Herold, the state pharmacy board's executive director.

"We're being proactive for the public health because we don't want another incident," she said. "We want to make sure that if the product is coming into California, it meets the requirements of California law."

Increasing amounts of these compounded drugs are flowing into the state. The Board of Pharmacy told a congressional committee in December that it licensed 86 out-of-state compounding pharmacies to make sterile medications for use in California in fiscal year 2011-12, compared with just 17 in 2003-04 and none in 2002-03.

But keeping track of out-of-state, large-volume pharmacies isn't easy, Herold conceded, because both state and federal laws are ambiguous about who is responsible for regulating different types of compounded drugs.

The advantage of traditional compounding, federal and state health officials agree, is that it enables pharmacies to offer prescriptions in individualized formats. That includes producing such drugs as creams, powders or solutions to direct relief to specific parts of the body or supplying drugs as a liquid to make it easier for people who can't swallow pills, for example.

Any state-licensed pharmacist can make these drugs with a doctor's prescription, if the pharmacy also has a state license. In most cases, regulation and inspections are the legal province of state pharmacy boards, not the FDA.

But over the last decade, the definition of what is a compounding pharmacy has been blurred. Some pharmacies have begun manufacturing large volumes of drugs — such as sterile, injectable steroids used to temporarily ease back pain — that are shipped in bulk to hospitals and outpatient surgical centers.

"FDA's ability to take action against compounding … that exceeds the bounds of traditional pharmacy compounding and poses risks to patients has been hampered by gaps and ambiguities in the law, which have led to legal challenges to FDA's authority to inspect pharmacies and take appropriate enforcement actions," FDA Commissioner Margaret Hamburg said in congressional testimony Nov. 14.

The House Energy and Commerce subcommittee on oversight and investigations was probing the New England Compounding Center-related deaths.

As part of Hamburg's effort to boost enforcement and protect patients, she met in December with representatives from the boards of pharmacies in all 50 states.

California supports federal and state efforts to figure out a way to avoid more contamination-related illnesses from these drugs, said Amy Gutierrez, a California Board of Pharmacy member and chief pharmacy officer for the Los Angeles County Department of Health Services.

"The problem is really the other states" that might have different or weaker standards or less enforcement resources than California, she said.

"What we're looking for is holding the out-of-state pharmacies that compound sterile products to the same standards as our own state-licensed pharmacies."

marc.lifsher@latimes.com

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Congress edges closer to 'fiscal cliff' deal but can't close it

WASHINGTON — Democrats and Republicans on Capitol Hill inched toward a compromise to avert part of the so-called fiscal cliff but remained unable to close a deal as each side struggled with internal tensions as well as the remaining gap between them.

Lawmakers have been trying to beat a deadline of midnight Monday, when tax rates are scheduled to go up for the vast majority of Americans. But they could continue chasing a deal for days — even until the new Congress is sworn in at noon Thursday. After that, the political dynamics could shift with the entrance of new members.

If Congress fails to act, the combination of new taxes and sharp cuts in defense spending and domestic programs, which also would take effect with the new year, could tip the economy back into recession, economists have warned.

On Sunday, talks hit a standstill early in the day after Senate Republican leader Mitch McConnell of Kentucky proposed slowing Social Security cost-of-living increases as part of the spending package. Democrats rejected the idea, and many Republicans quickly disavowed it.

In response to a request from McConnell, the Obama administration assigned Vice President Joe Biden to broker further negotiations.

"I'm willing to get this done, but I need a dance partner," McConnell said on the Senate floor. "The sticking point appears to be a willingness, an interest, or courage to close the deal."

Biden and McConnell talked by phone throughout the afternoon as the two sides appeared to close in on a potential compromise.

Republicans have said they are willing to raise taxes on wealthier households while stopping the tax increases for most Americans. The two sides have not agreed on an income threshold for the tax increases. Republicans suggested starting about $550,000 in taxable income for couples and $450,000 for single households. The most recent offer from Democrats had set the tax level slightly lower, about $450,000 for couples and $360,000 for singles.

But Republicans were also seeking to preserve inheritance taxes at the current rate of 35%, while Democrats have sought to raise them. Republicans want to keep the automatic spending cuts in place for now, while Democrats suggest easing them. Democrats also want to continue long-term unemployment benefits as part of the year-end package.

Other sticking points remain over adjustments to the rates Medicare pays doctors and fixing the tax code to protect middle-income Americans from the alternative minimum tax, which was designed to prevent tax avoidance by the wealthy. Both provisions involve laws that are not indexed for inflation and have required annual adjustments by Congress.

The closer the two sides edged toward compromise Sunday, the more divisions within their ranks became apparent.

Republican senators, worried they would be blamed for harming seniors, openly revolted once the McConnell proposal to trim Social Security benefits became public.

After a closed-door meeting, Sen. John McCain (R-Ariz.) articulated the public relations challenge the proposal posed his party: "What [Democrats] are saying now is, 'Republicans want to preserve tax breaks for rich people and give up seniors' Social Security.' It should be off the table. And I think most Republicans believe it should be off the table."

"I'm not a fan," said retiring Sen. Olympia J. Snowe (R-Maine). "I don't think it should be part of it, and I think there are others who shared that view."

Democrats rejected the proposal. An aide, speaking on the condition of anonymity to discuss the talks, said Senate Majority Leader Harry Reid (D-Nev.) "was taken aback and disappointed" by the idea. "We feel we are further apart than we were 24 hours ago."

Adjusting the cost of living for recipients of government benefits, including Social Security, had been offered by President Obama in talks with House Speaker John A. Boehner (R-Ohio) when they were negotiating a broader deficit reduction deal. But Democrats have rejected including the idea in the more limited package now under discussion.

At the same time, some Democrats worried that Biden, who has closed several deals before with McConnell, might be too eager to compromise compared with Reid. White House officials have been more worried than many congressional Democrats about the potential economic damage that the tax cuts and spending reductions could cause.

Obama made clear the line of attack that the White House would use against Republican leaders if Congress could not find a resolution.

"They have had trouble saying yes to a number of repeated offers," Obama said in an interview on NBC's "Meet the Press," which was recorded Saturday.

"If they can't do a comprehensive package of smart deficit reductions, let's at minimum make sure that people's taxes don't go up and that 2 million people don't lose their unemployment insurance."

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Kanye West, Kim Kardashian expecting 1st child

ATLANTIC CITY, N.J. (AP) — The Kardashian clan is getting bigger: Kanye West and Kim Kardashian are expecting their first child.

The rapper announced at a concert Sunday night that his girlfriend is pregnant. He told the crowd of more than 5,000 at the Ovation Hall at the Revel Resort in song form: "Now you having my baby."

The crowd roared.

Kourtney Kardahsian and Kris Jenner also tweeted about baby news.

West also told concertgoers to congratulate his "baby mom" and that this was the "most amazing thing."

Representatives for West and Kardashian didn't immediately respond to emails about the pregnancy.

The rapper and reality TV star went public in March. Kardashian married NBA player Kris Humphries in August 2011 and their divorce is not finalized.

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AP Writer Bianca Roach contributed to this report.

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Dr. Rita Levi-Montalcini, a Revolutionary in the Study of the Brain, Dies at 103

Fabio Campana/European Pressphoto Agency

Dr. Rita Levi-Montalcini in 2007. She discovered chemical tools the body uses to direct cell growth and build nerve networks.

Dr. Rita Levi-Montalcini, a Nobel Prize-winning neurologist who discovered critical chemical tools that the body uses to direct cell growth and build nerve networks, opening the way for the study of how those processes can go wrong in diseases like dementia and cancer, died on Sunday at her home in Rome. She was 103.

Her death was announced by Mayor Gianni Alemanno of Rome.

“I don’t use these words easily, but her work revolutionized the study of neural development, from how we think about it to how we intervene,” said Dr. Gerald D. Fishbach, a neuroscientist and professor emeritus at Columbia.

Scientists had virtually no idea how embryo cells built a latticework of intricate connections to other cells when Dr. Levi-Montalcini began studying chicken embryos in the bedroom of her house in Turin, Italy, during World War II. After years of obsessive study, much of it at Washington University in St. Louis with Dr. Viktor Hamburger, she found a protein that, when released by cells, attracted nerve growth from nearby developing cells.

In the early 1950s, she and Dr. Stanley Cohen, a biochemist also at Washington University, isolated and described the chemical, known as nerve growth factor — and in the process altered the study of cell growth and development. Scientists soon realized that the protein gave them a new way to study and understand disorders of neural growth, like cancer, or of degeneration, like Alzheimer’s disease, and to potentially develop therapies.

In the years after the discovery, Dr. Levi-Montalcini, Dr. Cohen and others described a large family of such growth-promoting agents, each of which worked to regulate the growth of specific cells. One, called epidermal growth factor and discovered by Dr. Cohen, plays a central role in breast cancer; in part by studying its behavior, scientists developed drugs to combat the abnormal growth.

In 1986, Dr. Levi-Montalcini and Dr. Cohen shared the Nobel Prize in Physiology or Medicine for their work.

Dr. Cohen, now an emeritus professor at Vanderbilt University, said Dr. Levi-Montalcini possessed a rare combination of intuition and passion, as well as biological knowledge. “She had this feeling for what was happening biologically,” he said. “She was an intuitive observer, and she saw that something was making these nerve connections grow and was determined to find out what it was.”

One of four children, Rita Levi-Montalcini was born in Turin on April 22, 1909, to Adamo Levi, an engineer, and Adele Montalcini, a painter, both Italian Jews who traced their roots to the Roman Empire. In keeping with the Victorian customs of the time, Mr. Levi discouraged his three daughters from entering college, fearing that it would interfere with their lives as wives and mothers.

It was not a future that Rita wanted. She had decided to become a doctor and told her father so. “He listened, looking at me with that serious and penetrating gaze of his that caused me such trepidation,” she wrote in her autobiography, “In Praise of Imperfection” (1988). He also agreed to support her.

She graduated summa cum laude from the University of Turin medical school in 1936. Two years later, Mussolini issued a manifesto barring non-Aryan Italians from having professional careers. She began her research anyway, setting up a small laboratory in her home to study chick embryos, inspired by the work of Dr. Hamburger, a prominent researcher in St. Louis who also worked with the embryos.

During World War II, the family fled Turin for the countryside, and in 1943 the invasion by Germany forced them to Florence. The family returned at the close of the war, in 1945, and Dr. Hamburger soon invited Dr. Levi-Montalcini to work for a year in his lab at Washington University.

She stayed on, becoming an associate professor in 1956 and a full professor in 1958. In 1962, she helped establish the Institute of Cell Biology in Rome and became its first director. She retired from Washington University in 1977, becoming a guest professor and splitting her time between Rome and St. Louis.

Italy honored her in 2001 by making her a senator for life.

An elegant presence, confident and passionate, she was a sought-after speaker until late in life. “At 100, I have a mind that is superior — thanks to experience — than when I was 20,” she said in 2009.

She never married and had no children. In addition to her autobiography, she was the author or co-author of dozens of research studies and received numerous professional awards, including the National Medal of Science.

“It is imperfection — not perfection — that is the end result of the program written into that formidably complex engine that is the human brain,” Dr. Levi-Montalcini wrote in her autobiography, “and of the influences exerted upon us by the environment and whoever takes care of us during the long years of our physical, psychological and intellectual development.”

This article has been revised to reflect the following correction:

Correction: December 30, 2012

An earlier version of this obituary misstated the year Mussolini issued a manifesto barring non-Aryan Italians from having professional careers. It was 1938, not 1936.

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Tribune Co. set to exit bankruptcy protection

Tribune Co. is expected to emerge from bankruptcy protection Monday with a new board of directors composed largely of entertainment-industry veterans.

Exiting bankruptcy would mark a milestone for Tribune, the parent of the Los Angeles Times and other newspaper and television properties.

Tribune sought Bankruptcy Court protection in December 2008 after a leveraged buyout by real estate magnate Sam Zell saddled the company with $12.9 billion in debt just as advertising revenue was collapsing. It is one of the longest bankruptcy cases in U.S. corporate history.

Tribune will emerge as a slimmed-down entity with a more stable financial base. But the media conglomerate will still be buffeted by the larger forces pounding the newspaper industry, specifically uncertainty over whether papers can generate sufficient revenue from digital operations.

"Tribune is far stronger than it was when we began the Chapter 11 process four years ago and, given the budget planning we've done, the company is well-positioned for success in 2013," Eddy Hartenstein, Tribune's chief executive, wrote in a note to employees Sunday night.

Tribune's new board of directors is expected to be made up of a who's who of Hollywood players. Most have no hands-on experience running newspapers and television stations, which are Tribune's biggest assets.

Five of the seven members have ties to the entertainment and media industries, including Hartenstein and Peter Liguori, a former News Corp. executive who is expected to succeed Hartenstein as Tribune CEO in the next few weeks.

Also expected to be named to the board are Peter Murphy, previously a longtime executive at Walt Disney Co.; Ross Levinsohn, former head of global media at Yahoo Inc.; and Craig A. Jacobson, a veteran entertainment attorney.

The board will be rounded out by Bruce Karsh, president of Oaktree Capital Management, the Los Angeles investment firm that owns about 23% of the new Tribune; and Kenneth Liang, an Oaktree managing director.

Tribune owns 23 local television stations, eight daily newspapers and Internet and other media properties.

Those holdings include KTLA-TV Channel 5, the Chicago Tribune, and national cable station WGN-TV. Tribune also holds slightly less than one-third of the Food Network cable channel and about a 25% stake in the CareerBuilder website.

Liguori is also a former Discovery Communications senior executive whose resume is in programming and marketing. He headed both the FX cable network and Fox Broadcasting at News Corp. At Discovery he served as chief operating officer of the cable programming giant.

Murphy spent almost two decades at Disney, rising to the position of chief strategist. He founded private investment firm Wentworth Capital Management. He has close ties to Angelo, Gordon & Co., an investment firm that will own roughly 9% of the new Tribune Co.

Levinsohn is a former head of global media at Yahoo. He also served briefly as its interim CEO before Google Inc.'s Marissa Mayer being tapped for that job. Levinsohn also is a former News Corp. executive who headed its interactive unit.

Jacobson, an attorney at Hansen, Jacobson, Teller, Hoberman, Newman, Warren, Richman, Rush & Kaller is one of Hollywood's more prominent deal-makers. His clients have included several high-profile executives and performers such as Ryan Seacrest.

Tribune remained profitable throughout the bankruptcy, building cash reserves of more than $2.5 billion as of Nov. 18, according to a U.S. Bankruptcy Court filing this month. Creditors are expected to immediately take nearly $3 billion in cash out of the new company, some of it coming from a new $1.1-billion loan that was approved as part of the bankruptcy.

The value of Tribune's newspaper properties has sunk to $623 million, a fraction of their value a few years earlier, according to an estimate filed in Bankruptcy Court in April.

A key question still to be answered is what Tribune will do with its newspapers. Some analysts believe the company will seek to sell the slower-growing newspapers to focus on TV holdings.

As for the Los Angeles Times, Rupert Murdoch's News Corp. has expressed interest, according to people familiar with the matter.

Aaron Kushner, owner of the Orange County Register, and Doug Manchester, the San Diego real estate developer who last year bought the local Union Tribune newspaper, also have shown interest.

Austin Beutner, the former venture capitalist and former deputy mayor of Los Angeles, told The Times in October that he has reached out to civic-minded investors who would consider acquiring the paper.

walter.hamilton@latimes.com

joe.flint@latimes.com

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