Disney joins JAKKS, LA billionaire to bring toys to life

LOS ANGELES (Reuters) – Walt Disney toys are sold around the world. Now, children can find them in the cloud as well.

The media giant is teaming up with toy company JAKKS Pacific and Patrick Soon-Shiong, Los Angeles’ wealthiest person, on a new line of toys – with a nifty technological twist designed to link the goodies that kids lug home from the store with Disney’s stable of well-known animated characters.

“DreamPlay“, developed by Soon-Shiong’s NantWorks company, and JAKKS works via an app that can be downloaded on Apple Inc devices like the iPad, or smartphones and tablets running Google Inc Android software. When a device’s camera is trained on any toy specifically designed to work with DreamPlay, it triggers one of thousands of preset animations that appear on the device’s screen and seem to be unfolding in the real world.

With viewers’ eyes locked on the tablet or smartphone screen, fairies appear to glide in and out of buildings, animated critters start playing musical instruments, mythical characters prance on a toy piano’s keyboard.

Disney, which licensed its characters to DreamPlay, and its partners hope that children will take to the new approach, which is intended to extend and expand the life of the toy. But it remains to be seen if the concept will prove to be more than a novelty, and be able to arrest a child’s infamously short attention span.

The three will demo their concept on Tuesday at the Consumer Electronics Show in Las Vegas, but Reuters got a sneak peak at the technology on Monday.

In a showroom in the 20th floor of a Santa Monica, Calif. building, visitors to JAKKS’ demonstration are treated to an animated version of Sebastian – the red Jamaican crab from Disney’s “Little Mermaid” movie – who pops up onscreen on an iPad seconds after the tablet’s camera is trained on a real-life set of toy bongo drums.

The animated crab pounces on the drums and proceeds to bang out a calypso song onscreen, with both Sebastian and the physical drum set appearing together as if the two shared the same cartoon.

REAL, VIRTUAL INTERACTION

DreamPlay allows not just Sebastian, but also Tinker Bell and a host of other well-loved Disney characters to “interact” virtually with specially made toys via image-recognition software. The software was developed by Soon-Shiong, a former cancer surgeon who created drugs to fight diabetes and breast cancer and then sold the companies that produced them for $ 8.6 billion.

Soon-Shiong teamed with JAKKS, a $ 678 million-a-year toy maker and licensee of toys based on the Princess line of dolls, Marvel action figures and other Disney toys, among others.

The technology works via the “cloud” – images and video clips stored on remote servers that are streamed to kids’ mobiles when the app recognizes a particular item.

“It’s a tremendous way to combine great technology and Disney’s magical story telling to extend the time a child can play with a toy,” said Bob Chapek, president of Disney’s consumer products unit. “Kids find out that playing with their toy doesn’t end when they get it home.”

Since taking over in 2011, Chapek has repositioned Disney’s consumer product unit to expand its use of technology with its toys. DreamPlay is the first of what Chapek says are other products that will twin technology with familiar Disney toys, although he won’t name them.

Down the road, Disney may explore new business models, including selling subscriptions to content created specifically to be used with a particular toy, said Chapek.

The market is hardly certain for a product that requires a child to hold up a phone or tablet, and peer through it to play with a toy that’s stationary. Will children want to see Rapunzel endlessly dancing on the keys of a piano or Rosetta, a fairy from Disney’s “Tinker Bell” movies, fly in and out of a cottage?

“The technology may be great, but no one has proven to me yet that a kid will sit in front of an iPhone or iPad instead of playing with a toy that’s right in front of him,” said Sean McGowan, a toy analyst with Needham & Co who downgraded JAKKS to hold in September along with other toy companies, and then downgraded JAKKS to underperform in October.

JAKKS intends to begin selling DreamPlay versions of toys from the Disney Princess line in October. It will then expand its offerings next year, with international sales starting in 2014, said Stephen Berman, JAKKS President and CEO.

DreamPlay toys will be “a couple of dollars” costlier than the regular version, he says.

Target stores and Toys R Us are among the U.S. retailers who will carry the DreamPlay line, Berman says. Top-Toy, the giant Nordic retailer, has also signed on, while Beijing Hualian Group, which operates supermarkets and department stores across China, is coming onboard as well.

“Kids don’t own iPhones or iPads but they all know how to use them,” says Berman. “Kids have so much more imagination than we do. Imagine recording a bunch of the videos and giving the kid an iPad to play with them on a trip to see the grandparents.”

JAKKS will ramp up marketing for the DreamPlay line, said Berman. DreamPlay toys will be prominently displayed at all the partner-retailers, he added, and shoppers will be encouraged to use their smartphones to view them.

Those that aim smartphones at a boxed Tinker Bell, for instance, may get a start as the fairy from “Peter Pan” literally soars out of the box, leaving an empty package behind.

“Technology can help people live better, work better, play better,” said Soon-Shiong as he showed off the line of toys. “This is the way they will play better.”

(Reporting By Ronald Grover; Edited By Edwin Chan)

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How Eva Mendes Helped Ryan Gosling's Mom Get Red Carpet Ready

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01/08/2013 at 11:00 AM ET

Matt Baron/BEImages; Stacie McChesney/NBC/AP

Ryan Gosling looked smokin’ hot in his sleek Gucci suit at Monday night’s Gangster Squad premiere in Los Angeles. But Gosling’s mom Donna (his date for the evening) almost distracted us from his sexiness, because she looked so darn good, too. So what was her secret?

“My mother’s wearing all my girlfriend’s clothes,” Gosling told E! News of his mom’s ruched dress, paisley trench and statement necklace. “I’m wearing Eva Mendes,” Donna confirmed, adding, “She let me raid her closet.”

Gosling and Mendes, who clicked while filming The Place Beyond the Pines together in 2011, were first spotted holding hands in September of that year on a low-key date at Disneyland. Since then, they’ve taken their romance to New York, Los Angeles, Gosling’s native Canada and Paris, with Mendes first meeting Gosling’s mom on a movie date in N.Y.C. last January.

The stars have managed to remain pretty quiet about their relationship to this point, making Gosling’s use of the world “girlfriend” last night all the more poignant. Tell us: Would you ever lend your partner’s mom your clothes? 

–Kate Hogan

PHOTOS: SEE MORE GLAM RED CARPET LOOKS IN ‘LOVE IT OR LEAVE IT?’

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Report: Death rates from cancer still inching down

WASHINGTON (AP) — Death rates from cancer are continuing to inch down, researchers reported Monday.

Now the question is how to hold onto those gains, and do even better, even as the population gets older and fatter, both risks for developing cancer.

"There has been clear progress," said Dr. Otis Brawley of the American Cancer Society, which compiled the annual cancer report with government and cancer advocacy groups.

But bad diets, lack of physical activity and obesity together wield "incredible forces against this decline in mortality," Brawley said. He warned that over the next decade, that trio could surpass tobacco as the leading cause of cancer in the U.S.

Overall, deaths from cancer began slowly dropping in the 1990s, and Monday's report shows the trend holding. Among men, cancer death rates dropped by 1.8 percent a year between 2000 and 2009, and by 1.4 percent a year among women. The drops are thanks mostly to gains against some of the leading types — lung, colorectal, breast and prostate cancers — because of treatment advances and better screening.

The news isn't all good. Deaths still are rising for certain cancer types including liver, pancreatic and, among men, melanoma, the most serious kind of skin cancer.

Preventing cancer is better than treating it, but when it comes to new cases of cancer, the picture is more complicated.

Cancer incidence is dropping slightly among men, by just over half a percent a year, said the report published by the Journal of the National Cancer Institute. Prostate, lung and colorectal cancers all saw declines.

But for women, earlier drops have leveled off, the report found. That may be due in part to breast cancer. There were decreases in new breast cancer cases about a decade ago, as many women quit using hormone therapy after menopause. Since then, overall breast cancer incidence has plateaued, and rates have increased among black women.

Another problem area: Oral and anal cancers caused by HPV, the sexually transmitted human papillomavirus, are on the rise among both genders. HPV is better known for causing cervical cancer, and a protective vaccine is available. Government figures show just 32 percent of teen girls have received all three doses, fewer than in Canada, Britain and Australia. The vaccine was recommended for U.S. boys about a year ago.

Among children, overall cancer death rates are dropping by 1.8 percent a year, but incidence is continuing to increase by just over half a percent a year. Brawley said it's not clear why.

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Wall Street dips as earnings season begins

NEW YORK (Reuters) - Stocks were little changed at the open on Tuesday as an earnings season expected to show sluggish corporate growth gets under way.

Profits in the fourth quarter are seen above the previous quarter's lackluster results, but analysts' current estimates are down sharply from where they were in October. Quarterly earnings are expected to grow by 2.8 percent, according to Thomson Reuters data.

If earnings growth appears to be "less bad" than expected that would translate into a near-term uptick in the market, according to Eric Wiegand, senior portfolio manager at U.S. Bank Wealth Management in New York.

"But I think there's still ample areas for concern," he said, listing policy worries in Washington and uneven economic activity as a result of Superstorm Sandy during last quarter.

The Dow Jones industrial average <.dji> fell 40.65 points, or 0.30 percent, to 13,343.64. The S&P 500 <.spx> lost 4.28 points, or 0.29 percent, to 1,457.61. The Nasdaq Composite Index <.ixic> dropped 5.04 points, or 0.16 percent, to 3,093.78.

German data showed industrial orders fell more than forecast in November due to a sharp drop in demand from abroad, reinforcing concerns that Europe's largest economy may have contracted in the fourth quarter of 2012.

Monsanto Co shares rose 3.2 percent to $99.05 after hitting a more than four-year high at $99.99. The world's largest seed company raised its earnings outlook for fiscal 2013 and posted strong first-quarter results.

Education provider Apollo Group and Dow component Alcoa Inc , the largest U.S. aluminum producer, round out the start of earnings season after the closing bell.

Shares of restaurant-chain operator Yum Brands Inc fell 4.6 percent to $64.78 a day after the KFC parent warned sales in China, its largest market, shrank more than expected in the fourth quarter.

London-traded Vodafone shares rose almost 2 percent after its partner in U.S. joint venture Verizon Wireless said it would be "feasible" to buy out the British group. U.S.-traded Vodafone stock fell 1.5 percent.

Sears Holdings shares fell 1.4 percent to $42.31 a day after the company said its chief executive will step down for family health reasons. The U.S. retailer also reported a 1.8 percent decline in quarter-to-date sales at stores open at least a year.

GameStop shares fell 7.1 percent to $23 after it reported sales for the holiday season and cut its guidance.

(Reporting by Rodrigo Campos; Editing by Nick Zieminski)

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Court in Bahrain Confirms Jail Terms for 13 Dissidents

CAIRO — A court in Bahrain on Monday upheld prison sentences for 13 of the country’s most prominent dissidents, in a decision that government opponents offered as evidence that the monarchy was ignoring calls to negotiate a political solution that could quiet a nearly two-year-old uprising.

The decision ends all appeals for the dissidents, who were sentenced to between five years and life in prison for their leadership roles in the revolt that began in February 2011, according to a colleague of one of the jailed opposition members. The 13 are part of a group of 20 opposition leaders who were sentenced by a military tribunal on charges that included trying to overthrow the government. Other dissidents were sentenced in absentia.

Since pledging to accept reform recommendations made by an independent panel that investigated the uprising — including to commute sentences of those charged with “political expression” — the government has continued to silence its critics. In November, the government stripped 31 people, including former opposition members of Parliament and exiled dissidents, of their citizenship.

Last month, a judge upheld a prison sentence for a popular human rights advocate, Nabeel Rajab, who was convicted of inciting protests. As the security forces have moved to contain street protests, the contest over freedom in Bahrain has moved to the judiciary. Activists accuse the courts of being little more than arms of the government that endorse charges for political crimes.

On Monday, in an apparent reaction to such allegations, Bahrain’s state news agency carried a statement affirming what it said was the judiciary’s independence and condemning “false defamatory statements.”

The dissidents who lost their appeal on Monday include human rights activists and opposition leaders. Some of the detainees have advocated the creation of a constitutional monarchy in Bahrain, while others have called for the fall of the government. They were arrested as part of a government crackdown on a pro-democracy uprising in 2011 led by members of Bahrain’s Shiite majority, who have protested against what they say is discriminatory rule at the hands of the Sunni monarchs.

As the dissidents have disappeared into jail or exile, their likenesses, in spray paint, have started to fill the walls of Shiite villages, where clashes between youths and the riot police have become the principal interaction between the state and its opponents.

The government has accused many of the dissidents of colluding with Iran to topple the state and has blamed the violence of some protesters for the absence of dialogue. Critics of the monarchy argue that by sidelining the most influential opposition members, government officials are making negotiation impossible.

“They are trying to pull us toward a security solution,” said Radhi Mohsen al-Mosawi, the acting secretary general of the National Democratic Action Society, a leftist opposition group whose leader, Ibrahim Sharif, was among the dissidents who lost his appeal on Monday. Mr. Sharif is serving a five-year sentence.

“They have made things so difficult for them, and for us,” said Mr. Mosawi, who added that his group still favored negotiations for a constitutional monarchy. “Our demand is a peaceful demand. It is a minimum demand.”

This article has been revised to reflect the following correction:

Correction: January 7, 2013

An earlier version of this article incorrectly stated the name of the leader of the National Democratic Action Society. He is Ibrahim Sharif, not Ibrahim Hussein.

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Kuwaiti journalist jailed for Twitter ‘insults’

KUWAIT CITY (AP) — A Kuwait newspaper says an online journalist has been sentenced to two years in prison for posts deemed “insulting” to the Gulf nation’s ruler — the second such ruling this week.

The decision reflects a widening social media crackdown across the Gulf Arab states to quell perceived political dissent.

Kuwait’s pro-government Al Watan newspaper reported Monday that Ayyad al-Harbi, a journalist at news website Sabr, was charged with posting Twitter messages considered offensive to the nation’s Western-allied emir. No other details were given.

Kuwait, which hosts thousands of U.S. troops, has been gripped by months of political unrest led by anti-government groups, including Islamist factions.

On Sunday, Kuwaiti media said a social media activist also has received a two-year prison term for Twitter posts that allegedly insulted the emir.

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Brad Pitt Hints at Return to China - Despite Being Banned

01/07/2013 at 11:35 AM EST

Brad Pitt as Austrian mountaineer in Seven Years in Tibet

David Appleby/AP

Looks like Brad Pitt is about to say "Ni hao" to China ... in person.

The actor – who was reportedly banned from China following the government's disapproval of his 1997 film Seven Years in Tibet, which portrayed harsh Chinese rule in Tibet – has hinted at a return to the country. And he took to social media to do it.

Via China's version of Twitter, called Sina Weibo, the actor posted from his verified account, "It is the truth. Yup, I'm coming ..."

The surprising statement is the actor's only "Tweet" on the social network, but it generated more than 24,000 comments from his nearly 160,000 followers.

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Your medical chart could include exercise minutes

CHICAGO (AP) — Roll up a sleeve for the blood pressure cuff. Stick out a wrist for the pulse-taking. Lift your tongue for the thermometer. Report how many minutes you are active or getting exercise.

Wait, what?

If the last item isn't part of the usual drill at your doctor's office, a movement is afoot to change that. One recent national survey indicated only a third of Americans said their doctors asked about or prescribed physical activity.

Kaiser Permanente, one of the nation's largest nonprofit health insurance plans, made a big push a few years ago to get its southern California doctors to ask patients about exercise. Since then, Kaiser has expanded the program across California and to several other states. Now almost 9 million patients are asked at every visit, and some other medical systems are doing it, too.

Here's how it works: During any routine check of vital signs, a nurse or medical assistant asks how many days a week the patient exercises and for how long. The number of minutes per week is posted along with other vitals at the top the medical chart. So it's among the first things the doctor sees.

"All we ask our physicians to do is to make a comment on it, like, 'Hey, good job,' or 'I noticed today that your blood pressure is too high and you're not doing any exercise. There's a connection there. We really need to start you walking 30 minutes a day,'" said Dr. Robert Sallis, a Kaiser family doctor. He hatched the vital sign idea as part of a larger initiative by doctors groups.

He said Kaiser doctors generally prescribe exercise first, instead of medication, and for many patients who follow through that's often all it takes.

It's a challenge to make progress. A study looking at the first year of Kaiser's effort showed more than a third of patients said they never exercise.

Sallis said some patients may not be aware that research shows physical inactivity is riskier than high blood pressure, obesity and other health risks people know they should avoid. As recently as November a government-led study concluded that people who routinely exercise live longer than others, even if they're overweight.

Zendi Solano, who works for Kaiser as a research assistant in Pasadena, Calif., says she always knew exercise was a good thing. But until about a year ago, when her Kaiser doctor started routinely measuring it, she "really didn't take it seriously."

She was obese, and in a family of diabetics, had elevated blood sugar. She sometimes did push-ups and other strength training but not anything very sustained or strenuous.

Solano, 34, decided to take up running and after a couple of months she was doing three miles. Then she began training for a half marathon — and ran that 13-mile race in May in less than three hours. She formed a running club with co-workers and now runs several miles a week. She also started eating smaller portions and buying more fruits and vegetables.

She is still overweight but has lost 30 pounds and her blood sugar is normal.

Her doctor praised the improvement at her last physical in June and Solano says the routine exercise checks are "a great reminder."

Kaiser began the program about three years ago after 2008 government guidelines recommended at least 2 1/2 hours of moderately vigorous exercise each week. That includes brisk walking, cycling, lawn-mowing — anything that gets you breathing a little harder than normal for at least 10 minutes at a time.

A recently published study of nearly 2 million people in Kaiser's southern California network found that less than a third met physical activity guidelines during the program's first year ending in March 2011. That's worse than results from national studies. But promoters of the vital signs effort think Kaiser's numbers are more realistic because people are more likely to tell their own doctors the truth.

Dr. Elizabeth Joy of Salt Lake City has created a nearly identical program and she expects 300 physicians in her Intermountain Healthcare network to be involved early this year.

"There are some real opportunities there to kind of shift patients' expectations about the value of physical activity on health," Joy said.

NorthShore University HealthSystem in Chicago's northern suburbs plans to start an exercise vital sign program this month, eventually involving about 200 primary care doctors.

Dr. Carrie Jaworski, a NorthShore family and sports medicine specialist, already asks patients about exercise. She said some of her diabetic patients have been able to cut back on their medicines after getting active.

Dr. William Dietz, an obesity expert who retired last year from the Centers for Disease Control and Prevention, said measuring a patient's exercise regardless of method is essential, but that "naming it as a vital sign kind of elevates it."

Figuring out how to get people to be more active is the important next step, he said, and could have a big effect in reducing medical costs.

___

Online:

Exercise: http://1.usa.gov/b6AkMa

___

AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner

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Wall Street falls after five-year high, earnings in focus

NEW YORK (Reuters) - Stocks fell on Monday as traders cashed in recent gains that lifted the S&P 500 to a five-year high on Friday and awaited Tuesday's start of the fourth-quarter earnings season.

Last week was the best for U.S. stocks in more than a year as a budget deal and economic data boosted investor confidence.

Investors will likely turn their attention to the fourth-quarter earnings season that kicks off this week. Earnings are expected to be only slightly better than the third-quarter's lackluster results and analysts' current estimates are down sharply from what they were in October.

"We have a cautious market entering fourth-quarter earnings season," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. "I think it's going to be a disappointing one this time around."

Financial shares will be in focus a day after global regulators known as the Basel Committee gave banks four more years and greater flexibility to build up cash buffers, scaling back moves that aimed to help prevent another financial crisis.

"Basel giving banks four more years to get their act together will be good" for stocks, Cardillo said.

Bank of America shares rose 0.5 percent to $12.17 after hitting their highest since May 2011 as it reached a settlement with Fannie Mae worth roughly $11.6 billion to resolve agency mortgage repurchase claims.

The bank also entered into agreements with Nationstar Mortgage Holdings and Walter Investment Management to sell about $306 billion of residential mortgage servicing rights.

Nationstar rose 16.8 percent to $38.80 and Walter Investment added 7 percent to $47.13.

The Dow Jones industrial average <.dji> fell 63.59 points, or 0.47 percent, to 13,371.62. The S&P 500 <.spx> dropped 6.53 points, or 0.45 percent, to 1,459.94. The Nasdaq Composite <.ixic> lost 12.56 points, or 0.41 percent, to 3,089.09.

Walt Disney Co started an internal cost cutting review several weeks ago that may include layoffs at its studio and other units, three people with knowledge of the effort told Reuters. Disney shares fell 1.4 percent to $51.46.

Video-streaming service Netflix Inc shares gained 4 percent to $99.78 after it said it will carry previous seasons of some popular shows produced by Time Warner's Warner Bros Television.

Amazon.com shares hit their highest price ever at $269.22 after Morgan Stanley raised its rating on the stock. Shares were up 3.6 percent at $268.50.

Roche's chairman was quoted as saying the Swiss pharmaceutical group is no longer considering a bid for the U.S. gene-sequencing company Illumina . Illumina shares were off 8 percent at $50.20.

Major U.S. technology companies could miss estimates for fourth-quarter earnings as budget worries likely led some corporate clients to tighten their belts last month.

(Reporting by Rodrigo Campos; Editing by Kenneth Barry)

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Letter From Washington: U.S. Fiscal Talks Made No One Look Good

WASHINGTON — A grand fiscal bargain, with perhaps $2 trillion more in deficit reduction over 10 years — more than a quarter of which would be additional revenue, with much of the rest obtained through well-crafted, significant cutbacks in big-ticket entitlements — could have been a win-win for Republicans and Democrats.

Along with terminating the high-end Bush tax cuts, this would have earned lawmakers public approbation for working together and given investor and business confidence a boost.

The corollary is the small-bore deal cobbled together to avoid the so-called fiscal cliff, which may be a lose-lose for both sides. Defying political physics, the White House and congressional Republicans emerged politically weaker and facing more trouble ahead.

President Barack Obama, who Republicans acknowledged had all the leverage in the latest round, could have hung tough and persevered with one goal: the bigger deal. Indisputably, Democrats got much more than Republicans. Yet even with this unusual leverage — without a deal, taxes would have increased for everyone — the Democrats got only about 60 percent of what the House speaker, John A. Boehner, had once been willing to give on taxes.

Republicans reinforced their image as protectors of the privileged. In the House of Representatives, which they control, they displayed dysfunction remarkable even by Washington standards. With bigger fights ahead over the debt ceiling and indiscriminate across-the-board spending cuts, the problems outweigh the possibilities for both sides.

The estate tax epitomizes this state of affairs. It is assessed on fewer than 1 percent of the wealthiest estates. Michael J. Graetz, a former Treasury official in the administration of President George H.W. Bush who has written a book on the subject, says that with huge deficits and worsening income inequality, “it is amazing that our political system cannot maintain an estate tax that contributes less than 1 percent of federal revenues from those Americans best able to afford it.”

Lawrence H. Summers, a former Treasury secretary, once observed, “There is no case other than selfishness” for cutting the estate tax.

There are legitimate debates about the effect on economic growth of tax rates on capital gains, dividends or corporate income. It’s tough to find a serious economist who makes that case for the estate tax; years ago, the conservative economist Irwin M. Stelzer described a low tax as “affirmative action” for wealthy heirs.

Still, reducing or eliminating the estate tax was a top priority for Republicans in this latest round. The White House essentially caved to a measure that will cost about $100 billion over 10 years and will benefit fewer than 5,000 wealthy estates.

In the 2010 year-end tax-cut deal, the Obama administration insisted on extending the refundable tax credits for the poor; resistant Republicans said they would go along only if the White House accepted two years of lower estate-tax rates. Agreed. This time, however, the refundable credits for the poor were extended only temporarily, while the more generous estate-tax provision is permanent.

The political appeal here is to reward big campaign contributors; that matters to Democrats as well as Republicans. When Vice President Joseph R. Biden Jr., in the private bargaining, argued for a tougher provision, the Senate Republican leader, Mitch McConnell, asked that it be put to a vote. The vice president knew that Democrats like Senators Max Baucus of Montana and Mary Landrieu of Louisiana would side with the rich heirs.

Lawmakers are braced for a tougher battle in the next two months over the debt ceiling and across-the-board spending cuts that neither side likes. Republicans contend that, unlike with the fiscal cliff — the package of tax increases and spending cuts that had been set to take effect with the new year — this time they have the leverage to force the president to accept big spending cuts, particularly of big-ticket entitlements.

House Republicans insist on the “Boehner rule,” that any increase in the debt ceiling be matched by a comparable reduction in spending. That isn’t realistic: The debt ceiling will have to be increased by almost $2 trillion over the next two years, and spending cuts of that order would be politically and economically disastrous. The speaker’s ability to maneuver may be limited, though. On the fiscal deal, his own majority leader and whip deserted him, as did seven current committee chairmen and almost two-thirds of his caucus.

Tougher still is the substance. House Republicans are all for big spending cuts, though other than some easy ones, including going after programs for the poor, they duck specifics.

They are fierce deficit hawks in principle, yet when specific cuts to Medicare, a health insurance program for the elderly, or Social Security, a retirement fund, are raised, they turn into pacifists.

And the president, who wouldn’t play for keeps when he had the leverage, vows this time will be different. He won’t negotiate over the debt ceiling; that would be tantamount, he proclaims, to negotiating with terrorists.

Mr. Obama demands that any spending cuts be accompanied by revenue increases.

He correctly notes that there already has been more than twice as much in spending cuts as in tax increases and that any subsequent action that involves only cuts would run counter to the recommendations of bipartisan panels like the 2010 commission headed by Alan K. Simpson, a former Republican senator, and Erskine Bowles, a former White House chief of staff under Bill Clinton. Republicans dismiss that as a nonstarter.

The bottom lines: The White House believes Republican leaders privately realize that holding the nation’s full faith and credit hostage to cutting popular programs is a loser. Congressional Republicans dismiss Mr. Obama’s lines in the sand, saying that he invariably backs down and that any economic fallout ultimately hurts his presidency.

Both points are persuasive.

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