Income Too High for a Roth IRA? Try These Alternatives

JANUARY 25, 2018

High earners may have a variety of options for saving for retirement—but income limits mean direct contributions to Roth IRAs generally aren’t among them. This is unfortunate because Roth IRAs offer tax-free earnings growth and withdrawals in retirement, making them a potentially valuable part of a broader investing and tax-planning strategy. Having both traditional and Roth accounts can help with tax diversification in retirement.

That doesn’t mean you don’t have other options for making your retirement savings plan more tax efficient. Your income doesn’t have to be a barrier. Here are some things to consider.

Are you getting the most from your 401(k)s?

Maxing out contributions to a traditional 401(k) is a good place to start. Such accounts have no significant income limits, so that shouldn’t be a constraint. Earnings will grow on a tax-deferred basis, though distributions in retirement will create future tax liability.

If your employer also offers access to a Roth 401(k), then you could consider using one to set aside at least some post-tax retirement savings. The good news here is that like their traditional counterparts, Roth 401(k)s don’t have strict income limits. As with a Roth IRA, you make Roth 401(k) contributions after taxes. Your earnings grow tax-free, and you pay no taxes when you take withdrawals in retirement.

Note that the annual contribution limit applies across all of your 401(k) accounts. For example, in 2018 contributions are capped at a combined $18,500 ($24,500 for those 50 and older), meaning you could consider contributing up to the maximum to between both a 401(k) and a Roth (401)k.

Consider a Roth conversion

Converting some or all of the funds in a traditional IRA into a Roth IRA is another option. This would mean paying tax on the converted funds up front and leaving them to grow tax-free for the future. This can make sense particularly if you expect to be in a higher tax bracket in the future than you are today and have a long time horizon.

Some advisors also see a so-called backdoor Roth IRA as another way to secure the tax perks provided by Roth accounts. It’s a unique—and for some tax advisors, controversial—strategy, but can work.

If you don’t already have a traditional IRA or rollover IRA, the backdoor Roth IRA route involves first opening a non-deductible traditional IRA and then at some point later converting it to a Roth account. How long you should wait is a matter of some debate as doing it too soon could cause complications with the IRS. The conversion would trigger income tax only on the portion of contributions that had grown in value since the initial funding. Once in the Roth IRA, the savings would compound tax-free.

If you already have a traditional IRA or rollover IRA, calculating your taxes can be more complicated. See The Backdoor Roth—Is It Right for You? for more details.

What about non-deductible IRAs?

Does it ever make sense to contribute to an IRA even if you can’t deduct the contributions? At the very least, you could still enjoy the potential for tax-deferred growth in the account.

“Think carefully before considering this option,” Rob Williams, managing director of financial planning at the Schwab Center for Financial Research, says. “You wouldn’t be getting any upfront tax break, and any future withdrawal of earnings would be taxed at your ordinary income tax rate.”

It’s possible that rate would actually be higher than what you would owe if you’d invested in a tax-efficient way in a regular taxable account. “With today’s low long-term capital gains and qualified dividend rates,  non-deductible contributions to a traditional IRA may make less sense,” says Rob.

Long-term capital gains are taxed at a maximum federal rate of 15% unless you’re in the top tax bracket (taxable income over $418,400 for singles, $470,700 for joint filers), in which case a 20% rate applies. A Medicare surtax of 3.8% on investment income for single filers with adjusted gross income over $200,000 ($250,000 for joint filers) may also apply, but even then the rate is still below the ordinary income tax rate .

Tax-efficient investing in a taxable account

There are other tax-efficient ways to invest in taxable accounts. Individual stocks, as well as most exchange-traded funds (ETFs) and index mutual funds, if you don’t trade often, can result in a lower tax bill.

You may owe only the long-term capital gains tax rate on earnings if you sell an investment at a gain, which is generally lower than the income tax rate. There may be some distributions along the way, but qualified dividends from stocks are taxed at the long-term capital gain tax rate, and ETFs and index funds can be managed tax-efficiently.

Having some money in taxable accounts can provide opportunities to reduce your tax bill by strategically harvesting losses. That’s not something you can do in your 401(k) or any IRA.

Saving in a taxable account could also help you achieve your estate planning goals. If you hold long-term investments in a traditional brokerage account, you can donate low-cost-basis securities to charity for a full fair market value deduction and no capital gains tax. You can also leave your appreciated shares to heirs who would receive a step-up in cost basis.

Finally, as noted above, having money in taxable accounts as well as tax-advantaged accounts can give you greater flexibility in managing your tax bracket as you plan your post-retirement cash flows. “This sort of tax diversification can be helpful, no matter your future tax rate,” says Rob.

Important Disclosures

For funds, investors should carefully consider information contained in the prospectus, including investment objectives, risks, charges and expenses. You can request a prospectus by calling Schwab at 800-435-4000. Please read the prospectus carefully before investing.

Investment returns will fluctuate and are subject to market volatility, so that an investor’s shares, when redeemed or sold, may be worth more or less than their original cost. Shares are bought and sold at market price, which may be higher or lower than the net asset value (NAV).

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.

Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.

This information is not intended to be a substitute for specific individualized tax, legal or investment planning advice. Where specific advice is necessary or appropriate, Schwab recommends consultation with a qualified tax advisor, CPA, financial planner or investment manager.

The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.

Schwab Intelligent Advisory is made available through Charles Schwab & Co., Inc., a dually registered investment advisor and broker-dealer.


Not your parents’ diesel (but maybe your kids’)

What’s good about diesel?

Well, as it turns out, a lot.  And if that seems surprising, then read on.

At Fuse, they put it this way: “The diesel engine has led to some of the most environmentally friendly vehicles that are sold at competitive prices. Diesel fuel remains a top environmentally-friendly alternative to gasoline because it’s one of the most energy dense fuels available…”.

And at Wired, they write that diesels “offer lots of torque for great off the line acceleration, don’t suffer from the cost or range anxiety associated with electrics, and finding a place to refuel is generally easy. Diesels are most efficient on the highway, good for drivers who spend more time in the suburbs than in the city.”

Many years ago, diesels had a reputation as noisy and smelly.  Two years ago, VW gave diesel a black eye with its “cheating” software, software to trick emissions tests on its diesel cars.

But as Live Science reports, ”It’s likely that cars of the future will include diesel technology that combines clean-emission techniques, power and fuel economy, Hillebrand said [Don Hillebrand, director of energy systems research at Argonne National Laboratory]. …some temperature and pressure regimes get efficient fuel combustion without producing either pollutant [soot or NOx].  Hillebrand’s team is developing low-temperature combustion systems that aim to do just that.”

There’s work ahead before those diesel engines come to market, so don’t look for them just yet.  But in a world where no single energy source can do it all – diesel fuel is, and should be, part of the mix for the cars and trucks of the future.

Yuck! (in a good way): Slime powered by STEM Technology

There are a lot of useful things you can make from petroleum and natural gas:  gas for your car, jet fuel for an airplane; a golf ball or a football; plastic pipe or plastic wrap.

But the science crew at Valero has something you can make that is TRULY useful.  Slime!

So clear off the kitchen table (spread out some newspapers, or plastic wrap); gather up your kids (young and young-at-heart); and get ready for an experiment in the “home lab”.

Stuff you’ll need:

½ cup white glue (like Elmer’s).

1 squirt of foaming shaving cream.

2 pumps of foaming hand soap.

3 pumps of hand lotion.

Borax (in powdered form, which you can usually find in a grocery or hardware store).

Food coloring (your favorite color).

Glitter (if you like a sparkly slime).

What you’ll do:

Pour the ½ cup of glue into a bowl (no, not the holiday china).

Add the squirt of shaving cream, the two pumps of soap and the 3 pumps of lotion.

Mix.  Well.

Add food coloring (and the glitter, if you’re using it).

In a separate bowl, mix (also well) equal amounts of borax and water (try a half-cup each to start).

SLOWLY pour the borax solution into the first bowl while you mix with your fingers until it feels like…slime!

Enjoy!  Or whatever it is a person does with slime.

Just in case: 

If the slime starts to get sticky, blend in a little more of the borax and water solution.

If the slime gets onto anyone, vinegar will get the slime out of clothes and mayo (yes, really) will take the slime out of hair.

And if you are a visual learner:

You can find a video to follow along here:  How to make slime

Is That Your Car Going Ka-Ching?

Is your style of driving costing you?  Could be.  In fact, if this sounds like you — speed up, slam on the brakes, repeat – then you could be paying an extra dollar a gallon, every time you fill up.

That’s the word from researchers at the Department of Energy.

Now, even if we do it anyhow, most of us know that driving really fast and hitting the brakes, over and over and over again – is not great for gas mileage, or for our car either.

This new study tells us, we’re right about that.  And having to fill up more often, because our gas mileage is down, turns out to cost us the equivalent of spending anywhere from 25 cents to a dollar more, for every gallon of gas.  You can do the math for your car, but we’d say that’s an expensive (bad) habit.

If you’re a numbers person, here are the numbers on gas mileage:  in stop and go traffic, that speed up/slow down driving lowers gas mileage from 10 to 40 percent.  On the highway, you lose 15 to 30 percent.  And in your wallet, well, you know now what you lose.

And that’s – our driving tip for the week.

This Is What A Miracle Looks Like

RoboCop.  Terminator.   Yeah, they’ve heard all that before.
And in fact, if you saw someone stand up, wearing one of these, heading your way, your first instinct might be to look for the nearest exit…

…but in fact, what you’d be seeing, is one of the closest things to a miracle on this earth.*

Because Paul Meyer, Dan Rose, Maria Rea or any of the other men and women who strap themselves into one of those exoskeletons, get up and walk across a room – are men and women who were told they’d never walk again.

Army Sergeant Dan Rose was on a mine-sweeping operation in Afghanistan, when a mine exploded.  When he came to, he was upside down and his legs didn’t move.

When her car went off the road in rural Georgia, teacher Maria Rea was thrown seventy-five feet away, into a field, her hip and pelvis shattered, unable to walk.

Police Officer Paul Meyer was on a training exercise, when a 110-foot tree fell over on him, paralyzing him from the waist down.

And yet, now, they walk.

Once upon a time though, that would not have been possible.  The severity of their injuries would probably have meant, that the only way of getting around would have been in a wheelchair.  What’s changed that, is the exoskeleton – which is, in fact, a little like a skeleton you wear on the outside.

Technically, it’s a wearable “device”.  It can be strapped onto, over legs, hips, torso, arms, all of the above.  It isn’t like armor, because it doesn’t just sit there.  But it isn’t robotic either, because it doesn’t do all the work for you.  These exoskeletons have sensors and power – but they also require your “sensors” and your “power”.

There’s plenty that goes into the making of an exoskeleton.  One important part are the materials made possible by petrochemicals.  Petrochemicals like ethylene and butadiene.

Now if you don’t spend 9 to 5 in a lab, those names might set your head spinning a bit.  So here’s how that works.   From crude oil or natural gas, we can make various chemicals (“petrochemicals” like ethylene and butadiene) – from those chemicals, we can make various materials (like the ABS and polycarbonate in exoskeletons) – and from those plastics we can make, almost anything, it turns out.  Like exoskeletons.

Christy Smitheran, a physical therapist who teaches people how to use the exoskeleton device, has more than one story about someone who got up and walked across a room for the first time after their accident.  After they’d been told they’d never walk again.  Maybe after they believed they’d never walk again.  And they just cry.

That isn’t to say it’s easy.  Fifteen minutes in the exoskeleton and, as Smitheran says, you’re “sweating buckets.”  It’s a workout.  A hard workout.  But for someone who’s been told they’ll never walk again, that workout is an unimaginable gift.

But these exoskeletons are not workout machines.  You put one on, so that you can walk across the room. So you can walk up, and down the stairs in your house.  So you can walk outside.  So you can walk in the park, on the grass.  So you can walk with your kids, your sweetheart, your friends.

So that Paul Meyer could stand, raise his right hand and take the oath to receive his promotion to police sergeant, Portland Bureau of Police.

So that Dan Rose could stand for the playing of the National Anthem at the Indianapolis 500.

So that Rylie, Maria Rea’s seven-year-old daughter, could see for the first time in her young life, her mom walking.

So.  Even though the word “petrochemical” sounds pretty down to earth — and certainly not the stuff dreams are made of — there are dreams in those ethylenes and butadienes.  Like this one.

A wounded vet comes home from war, paralyzed, in a wheelchair – and his young niece imagines someday, taking a walk with her uncle.  Now, she can.

*That particular miracle, is an exoskeleton made by ReWalk.

Oil That Battery!

Tired of waiting – and waiting, and waiting for your phone or laptop battery to charge up?

Try adding a little oil.

Ok, at home – but researchers led by a team at Rice University have found that asphalt (made from petroleum) added to those lithium batteries – speeds up charging 10 times, even 20 times faster.

How cool is that?  This cool: “The capacity of these batteries is enormous, but what is equally remarkable is that we can bring them from zero charge to full charge in five minutes, rather than the typical two hours or more needed with other batteries.”  That’s Rice professor James Tour, speaking to

Want even better?  A side benefit of the new combination battery, is that it prevents “dendrite formation.”  Significant, because, as Futurity puts it, dendrites “invade a battery’s electrolyte … and can cause the battery to fail, catch fire, or explode.  But the asphalt-derived carbon prevents any dendrite formation.”

Oh, and the asphalt/lithium battery – is easier to produce and costs less too.

So jump a short distance into the lithium-asphalt future – and if you drain the battery on your phone watching a movie or a game –  take a popcorn break, plug in your phone – and by the time you’re back, so’s your phone.  Thanks asphalt!

Google Glass out, Goggle in

Remember “Google Glass” – the glasses with the camera and the lenses like a computer screen?

You’re not likely to see those anywhere these days – but if you were out on Colorado’s Western Slope, you might see BP workers wearing smart goggles out in the field.  They aren’t made by Google, but they might remind you of the glasses.

The Denver Post describes them this way:

“…safety goggles that allow workers to read sensor information on their lenses. For example, when they look at a tank, the temperature, pressure and level show up on the lens.

“If workers run into an issue they need help on, they can call up technicians and show them the equipment in question through the goggles. They are coached on how to make the needed repair, avoiding the down time that comes with putting in a repair ticket and waiting for a technician to come out.”

So workers can see the problem (through sensor data) and the solution (projected on the glasses/screen by an expert back at headquarters.  And these goggles can work out in the (oil)field, for example, because BP uses its crew trucks to create a Wi-Fi hotspot almost everywhere its workers need to go (and on the Western Slope, that covers a lot of ground).

Big data, analytics, the Internet of Things – the oil business has a lot of Silicon Valley in it these days.

Drones create ‘hands free’ harvest

Blade Runner, meet Blade Cutter.

Ok, they’re not androids, they don’t look anything like people – but on one farm in England, the first “hands free” harvest has just been brought into the barn.

That’s because this “Hands Free” is a robotic farm.  Not because they grow robots, but because robots do all the field work – the plowing and the planting, the watering and the fertilizing, the weeding and – the harvesting.

Now, “hands free” (up there surveying a newly sprouted crop), is not replacing the farmer – just doing the field work for her or him.

So the “crew” on this farm is mostly made up of standard farm machines – a tractor, a combine, a grain harvester – packed with GPS, electronics and robotic gear.  The first step was running everything by remote control – but now the researchers running this experiment (and it is still an experiment) are letting the robots run the farm machinery, and work through an entire seasonal cycle – from plowing to harvesting.

Ah, and the drones are used to check on the crop, and even to dip down, cut off a few blades from a plant, and bring it back to the farmer, for a check (More water?  More fertilizer?  Bug problem?)

Now, the harvest is in, and coming soon, a limited edition “hands free” beer, using this year’s barley harvest.

Yes, the beer will be made by people.  And unfortunately no, we won’t be able to toast the robotic harvesters.  This batch of beer will be only for people involved with the project.  Of course, if one of those robots asked for a pint, no doubt they’d pour one.

Self-cleaning plastics key for hospitals

So maybe it isn’t the self-cleaning house that many of us look forward to one day – but a self-cleaning plastic isn’t bad.  Especially when that plastic is being used in hospitals – in tubes and monitors, trays and implants – in an environment where germs are especially dangerous.

If you’re in the hospital, and you’re already sick, more germs is the last thing you want.  And yet, bacteria are all over hospitals.

Enter plastics, with a twist.  Two twists actually.  One is coating plastic surfaces with the same special plastic that’s may already be on your smartphone screen (because it conducts electricity).  The second is adding to that plastic a layer of tiny (nano-tiny) silver particles.

Doctors know that both silver and electricity kill bacteria.  But use just one or the other, and you need a lot of silver, or a high dose of electricity – which is bad for people, as well as germs.  The new discovery (by a team of Swedish scientists) – is that when you combine the two, a little silver and a low current have the same deadly effect on germs, and no effect on us.  Except to help us stay healthier in the hospital, and go home sooner.

Oil and water CAN mix

So maybe our parents weren’t right about everything.  Because it turns out, oil and water CAN mix.

And the place they meet, is a new fleece, made by BASF, and used to make a cooling jacket or vest.  Yes, this fleece keeps you cool.  The magic element is an acrylate polymer that absorbs water.  Dip this jacket in water, and in a few seconds, it’s absorbed ten times its weight, and is still dry on the outside.  (For that, you can thank propylene, a petrochemical).

So how does that keep you cool?  As you work, or run, or do any other activity in the vest, the water soaks up your body heat, and the hot water evaporates, keeping you cool inside.

BASF calls it Luquafleece – but you might call it portable air conditioning.

And if you happen to be a soccer fan, you’re following in the footsteps of our own players, as well as the national teams in countries like Ireland and Switzerland.  They use vests and hats made from this material to cool off at half-time.  So maybe you can’t bend it like Beckham, but you can chill it just the same.

Cars made of foam? Oh yeah.

The latest in fuel-efficiency for cars – might turn out to be something old, something new.

Using plastics in cars isn’t new, but there is a technology originally developed for marine applications – super-strong, super-light “syntactic foam” – that is finding new and interesting uses.  And if you’re picturing a flapping plastic bag for a window, or even that impossible-to-open package that toothbrushes and batteries and light bulbs come in – not to worry.

Syntactic foams are already used to make boat hulls and rocket boosters (and even soccer balls) – so they are proven to be durable and safe.  And now, new high-tech polymers and production methods make foams that are rocket-booster strong, as well as lighter and cheaper than ever before.

How do you make foam like that?  Here’s the Syntactic Science 101:  Syntactic foam is actually a polymer or epoxy filled with tiny hollow spheres called microballoons. (Microballoons are most commonly used as a core material sandwiched between plastic, fiberglass or metal panels.) These tiny spheres give the overall structure greater strength, while allowing for much lighter weight.

So, a car made with syntactic foam will be a lighter car, which uses less gas – which is good for you, every time you stop at the pump – and good for us all, using our natural resources wisely.

Even so, while it is plenty tough, you still might want to stop at kicking the tires on your new “foam car.”

Learn More

We invite you to join us in thinking about the role fuels and petrochemicals will play in our shared future. If you can imagine it, chances are we’ll be part of it.
America’s fuels and petrochemicals. Imagine that.

The Importance of Tax-Efficient Investing


JANUARY 12, 2018

Benjamin Franklin’s old line about death and taxes rings as true today as it did more than 200 years ago. Taxes are such a normal part of life that people may overlook them until it’s time to file their returns. Unfortunately, by that point it’s usually too late to implement a strategy for minimizing their tax bill.

Returns lost to taxes

When it comes to investing, it’s not just how much you make that matters—it’s how much you keep after taxes.

The Schwab Center for Financial Research examined the long-term impact of taxes and other expenses on investment returns and concluded that while investment selection and asset allocation are still the most important factors affecting your returns, minimizing taxes and other costs isn’t very far behind.

The good news is you can exercise a good deal of control here. With a bit of planning, you can maximize the tax efficiency of your portfolio and help reduce the effect of taxes on your investments.

Think of it this way: You can exercise far more control over your portfolio’s tax situation than you can over its exposure to the short-term gyrations in the market.

How do I maximize tax efficiency?

Investment accounts can be divided into two main categories, taxable accounts (like a brokerage account) and tax-advantaged accounts (such as an IRA, 401(k), or Roth IRA). As a general rule, investments that tend to lose less of their return to taxes are good candidates for taxable accounts. Likewise, investments that lose more of their return to taxes may be better suited for tax-advantaged accounts. Here’s where you might consider placing your investments:

Of course, this presumes that you hold investments in both types of accounts. If all your investment money is in your 401(k) or IRA, then just focus on asset allocation and investment selection.

Diversifying by tax treatment

Holding your investments in different accounts based on tax treatment (i.e. taxable and tax-advantaged accounts) adds value during the accumulation phase of your financial life by allowing you to defer taxes (or, in the case of a Roth, eliminate entirely the taxes on investment returns1). It also adds an additional layer of diversification to your portfolio during the distribution phase in retirement. Call it “tax diversification.”

Diversifying by tax treatment can be especially important if you’re uncertain about the tax bracket you’ll end up in down the road. For example, if you’re on the fence, instead of choosing between a traditional IRA or 401(k) and a Roth account, why not split your contributions between the two? When you start withdrawing money in retirement, you’ll be able to manage your income tax bracket with more flexibility because you’ll be able to choose which accounts you take your cash from based on the tax implications.

For example, to minimize your tax burden, you could focus on taking tax-free municipal bond income, qualified dividends and long-term capital gains from your taxable accounts and tax-free income from your Roth accounts. That would free you up to take only enough money from your taxable IRAs to keep you from moving into the next highest tax bracket (or to satisfy required minimum distributions, if applicable).

Making strategic use of your different accounts according to their tax treatment can also help you plan your charitable giving and estate planning goals—different accounts receive different types of gift and estate tax treatment. For example, you might want to give appreciated securities from your taxable accounts to charity for a full fair market value deduction and no capital gain tax. You can also leave such shares to your heirs who will receive a step-up in cost basis after you’re gone. Roth IRAs also make a great bequest, as distributions are free from income tax for your beneficiaries.

However you decide to split up your portfolio between account types, remember that for asset allocation purposes, you should still think of all your investments as being part of a single portfolio. By way of an oversimplified illustration, if you kept all your stocks in your taxable account and an equal amount of money in bonds in your tax-advantaged account, you wouldn’t have two portfolios consisting of 100% stocks and 100% bonds. You would have one portfolio consisting of 50% stocks and 50% bonds. The different assets just happen to be in different accounts.

Other considerations

In general, holding tax-efficient investments in taxable accounts and less tax-efficient investments in tax-advantaged accounts should add value over time. However, there are other factors to consider, including:

  • Periodically rebalancing your portfolio to maintain your target asset allocation. Because rebalancing involves selling and buying assets that have either grown beyond or fallen below your original allocation—essentially, you take profits from your winners and buy assets that have underperformed—it could cause an additional tax drag on returns in your taxable accounts. In taking profits from assets that have grown, you may incur either long- or short-term capital gains. You may want to focus your rebalancing efforts on your tax-advantaged accounts and include your taxable accounts only when necessary. Adding new money to underweighted asset classes is also a tax-efficient way to help keep your portfolio allocation in balance.
  • Active trading by individuals or by mutual funds, when successful, tends to be less tax-efficient and better suited for tax-advantaged accounts. A caveat: Realized losses in your tax-advantaged accounts can’t be used to offset realized gains on your tax return.
  • A preference for liquidity might prompt you to hold bonds in taxable accounts, even if it makes more sense from a tax perspective to hold them in tax-advantaged accounts. In other situations, it may be impractical to implement all of your portfolio’s fixed income allocation using taxable bonds in tax-advantaged accounts. If so, compare the after-tax return on taxable bonds to the tax-exempt return on municipal bonds to see which makes the most sense on an after-tax basis.
  • Estate planning issues and philanthropic intent might play a role in your portfolio planning. If you’re thinking about leaving stocks to your heirs, stocks in taxable accounts are generally preferable. That’s because the cost basis is calculated based on the market value of the stocks at the time of death (rather than at the time they were originally acquired, when they may have been worth substantially less). In contrast, stocks in tax-deferred accounts don’t receive this treatment, since distributions are taxed as ordinary income anyway. Additionally, highly appreciated stocks held in taxable accounts for more than a year might be well-suited for charitable giving because you’ll get a bigger deduction. The charity also gets a bigger donation, than if you liquidate the stock and pay long-term capital gains tax before donating the proceeds.
  • The Roth IRA might be an exception to the general rules of thumb discussed above. Because qualified distributions are tax free, assets you believe will have the greatest potential for higher return are best placed inside a Roth IRA, when possible.

The bottom line

If you want to keep more of your income, managing your investments with tax efficiency in mind is a must. What’s more, tax efficient investing techniques are accessible to almost everyone—it just takes some planning to reap the benefits. If you have a tax or financial advisor, be sure to talk with them about tax efficient strategies that could be implemented within your investment portfolios or call a Schwab Financial Consultant to learn more.

If you take a distribution of Roth IRA earnings before you reach age 59½ and before the account is five years old, the earnings may be subject to taxes and penalties.

Important Disclosures

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone.

Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed. Supporting documentation for any claims or statistical information is available upon request.

This information does not constitute and is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, Schwab recommends consultation with a qualified tax advisor, CPA, financial planner, or investment manager.

Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.

Fixed income securities are subject to increased loss of principal during periods of rising interest rates. Fixed‐income investments are subject to various other risks including changes in credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications and other factors. Lower rated securities are subject to greater credit risk, default risk, and liquidity risk.

Tax‐exempt bonds are not necessarily a suitable investment for all persons. Information related to a security’s tax‐exempt status (federal and in‐state) is obtained from third‐parties and Schwab does not guarantee its accuracy. Tax‐exempt income may be subject to the Alternative Minimum Tax (AMT). Capital appreciation from bond funds and discounted bonds may be subject to state or local taxes.

Capital gains are not exempt from federal income tax.

Risks of the REITs are similar to those associated with direct ownership of real estate, such as changes in real estate values and property taxes, interest rates, cash flow of underlying real estate assets, supply and demand, and the management skill and credit worthiness of the issuer.

Diversification and asset allocation strategies do not ensure a profit and cannot protect against losses in a declining market.

Rebalancing may cause investors to incur transaction costs and, when rebalancing a non-retirement account, taxable events can be created that may affect your tax liability.

Investing involves risk including loss of principal.

The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.


The Backdoor Roth—Is It Right for You?

JANUARY 12, 2018

A Roth individual retirement account (IRA) would seem to be off limits for many higher-income earners, thanks to strict income caps on contributions to these accounts.

But some advisors suggest another way into a Roth—if you’re willing to take the backdoor route. By this method, you open a traditional IRA, make your desired contribution and then, at a later date, convert the funds to a Roth IRA.

Could it really be that easy to sidestep restrictions that have kept many investors from enjoying a Roth IRA’s tax advantages? This strategy has gained popularity with some higher-income earners, notes Rob Williams, managing director of financial planning at the Schwab Center for Financial Research. But the IRS hasn’t weighed in definitively on what’s allowed, so it’s helpful to understand some of the issues—and it’s highly recommended that you work with a professional accountant or tax advisor, Rob says.

The appeal and limitations of a Roth

With a Roth IRA, you get no up-front tax deduction, as you do with a traditional IRA, 401(k) retirement plan or other tax-deferred account. However:

  • You pay no tax on either principal or earnings when you withdraw your money (although you must be at least age 59½ and have had the Roth for five years).
  • There’s no time requirement on when you have to withdraw money, if ever—an appealing option for those wanting to leave the money to heirs.

The trouble has been, of course, that Roth IRAs technically are only available to those whose annual income is below certain levels. In 2018 those limits are:

  • $199,000 or less for married couples filing jointly
  • $135,000 or less for single filers

On the positive side, an increasing number of employers have added Roth options to 401(k) plans. You can choose this option and contribute post-tax payroll deductions into a Roth 401(k), with no income limits.

A two-step Roth conversion process

In 2010, Congress passed rules to provide more flexibility and allow retirement savers to convert savings held in a traditional IRA into a Roth IRA, paying taxes on the distributions when they make the conversion. Some higher-income earners use this approach, in a two-step process:

  1. Open a non-deductible traditional IRA and make after-tax contributions. For 2018, you’re allowed to contribute up to $5,500 ($6,500 if you’re age 50 or older). Make sure you file IRS Form 8606 every year you do this.
  2. Transfer the assets from the traditional IRA to a Roth IRA. You can make this transfer and conversion at any point in the future. Some advisors suggest waiting a few months.

Pay the tax due

The conversion triggers income tax on the appreciation of the after-tax contributions—but once in the Roth IRA, earnings compound tax-free. Distributions from the Roth IRA in the future are tax-free as well, as long as you are 59½ and have held the Roth for at least five years (note that each conversion amount is subject to its own five-year holding period as it relates to tax-free withdrawals).

If you have no other IRAs, figuring out your tax due will be simple. However, it can be more complicated if you have other IRAs. The IRS’ pro-rata rule requires you to include all of your traditional IRA assets—that means your IRAs funded with pretax (deductible) contributions as well as those funded with after-tax (nondeductible) contributions—when figuring the conversion’s taxes. Then, you pay a proportional amount of taxes on the original account’s pretax contributions and earnings.

Say you contribute $5,500 to a nondeductible traditional IRA. You also have a rollover IRA worth $94,500 from a previous 401(k) made with pretax contributions. In this case, 94.5% of any conversion would be taxable. Here’s the math:

  • Total value of both accounts = $100,000
  • Pretax contributions = $94,500
  • After-tax contribution: $5,500
  • $5,500÷$100,000 (expressed as percentage) = 5.5%
  • $5,500 (the amount converted) x 5.5% = $302.50 tax-free
  • $5,500 – $302.50 = $5,197.50 subject to income tax

Note: If your 401(k) allows you to “roll in” an IRA account, as some do, you can essentially take your existing IRA out of the conversion calculation.

The backdoor Roth may not last forever

Although this strategy has existed since 2010, the IRS has not officially commented or provided formal guidance on whether it violates the step-transaction rule. (When applied, this rule treats what are several different steps as if they were a single transaction for tax purposes.) Experts have mixed opinions on the likelihood of this happening, but the lack of a definitive ruling means there is some risk involved. If the IRS decides that the loophole is a violation, you could owe a 6% excise tax for overfunding your Roth.

If restrictions do come into play at some point, they could require backdoor Roth converters to pay a penalty or they might include a grandfather clause. In the meantime, it’s an option to consider.

Roth conversions generally can make sense, generally, for many higher-income investors with large amounts saved in traditional IRA or 401(k) accounts, Rob says. “Having investments in traditional brokerage accounts, IRAs, and Roth IRAs as well as 401(ks) can increase flexibility in retirement,” Rob says.

But Rob says if you use this backdoor Roth strategy solely to sidestep the earnings limits on Roth IRA contributions, you should be aware of the risks and seek the counsel and support of a tax professional.

Important Disclosures

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.

This information is not intended to be a substitute for specific individualized tax, legal or investment planning advice. Where specific advice is necessary or appropriate, Schwab recommends consultation with a qualified tax advisor, CPA, financial planner or investment manager.

Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.

The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc.


James Franco Accused of Inappropriate Behavior by Five Women


By Alex Stedman

LOS ANGELES ( – Five women have come forward to accuse James Franco of sexually inappropriate or exploitative behavior in a report published Thursday by the Los Angeles Times .

Four of the women were former acting students of Franco’s, including Sarah Tither-Kaplan, who attended Franco’s Studio 4 that abruptly closed last fall. Tither-Kaplan said she was cast in an unreleased film, “The Long Home,” as a prostitute, and was asked, along with other women, if she would appear in a “bonus scene” depicting an orgy, where Franco would simulate oral sex on the women.

However, in each instance, Tither-Kaplan said, Franco removed the plastic guard that covered the women’s vaginas before simulating oral sex. Another actress who participated in the shoots confirmed Tither-Kaplan’s account to the Times.

“I got it in my head pretty quickly that, OK, you don’t say ‘no’ to this guy,” Tither-Kaplan said.

Two other women, Hilary Dusome and Natalie Chmiel, spoke about Franco’s behavior at Playhouse West, where he served as an acting teacher before starting Studio 4. Both recalled a “hostile” shoot at a strip club, where Franco allegedly approached the actresses and asked if they wanted to take their shirts off. When no actresses volunteered, Dusome said, Franco stormed off. Chmiel remembered Franco being “visibly angry” when the women declined to take their shirts off.

Katie Ryan, who took several classes at Studio 4, said Franco “would always make everybody think there were possible roles on the table if we were to perform sexual acts or take off our shirts.” She also said that Franco would often send mass emails about auditions for hooker or prostitute roles.

A fifth accuser, Violet Paley, was not a student of Franco’s, but said he offered to give her notes on a script. Paley claimed that Franco later pressured her into performing oral sex on him while the two were sitting in her car.

“I was talking to him, all of a sudden his penis was out,” she said. “I got really nervous, and I said, ‘Can we do this later?’ He was kind of nudging my head down, and I just didn’t want him to hate me, so I did it.”

Paley said she told Franco that someone had spotted them in her car in order to stop the act.

The Times report comes days after Franco won a best actor Golden Globe for his work in “The Disaster Artist.” Franco wore a Time’s Up pin to the ceremony in solidarity with the movement against sexual harassment and abuse, a move that prompted several women — including Tither-Kaplan and Paley — to come forward against Franco on Twitter.

On Tuesday, a New York Times event featuring Franco was canceled as backlash grew on social media. That same night, Franco appeared on “The Late Show,” where he denied the social media allegations to Stephen Colbert.

“In my life, I pride myself on taking responsibility for things that I’ve done,” he said. “I have to do that to maintain my well-being. I do it whenever I know that there’s something wrong that needs to be changed, I make it a point to do it.”

“The things that I heard were on Twitter are not accurate, but I completely support people coming out and being able to have a voice because they didn’t have a voice for so long,” he added.

A rep for Franco did not immediately respond for a request for comment. Franco’s lawyer, however, denied the claims to the Times, and pointed to Franco’s comments on “The Late Show.”

YouTube pares back Logan Paul partnership after suicide video post

Logan Paul arrives at the 2017 Teen Choice Awards in Los Angeles, California, U.S. August 13, 2017. Picture taken August 13, 2017. REUTERS/Mike Blake

LOS ANGELES (Reuters) – YouTube said Wednesday it is removing popular American vlogger Logan Paul from its Google Preferred platform and putting future projects with him on hold, after Paul posted a video on the platform of a suicide victim in Japan.

“In light of recent events, we have decided to remove Logan Paul’s channels from Google Preferred. Additionally, we will not feature Logan in season 4 of ‘Foursome’ and his new Originals are on hold,” Alphabet Inc’s YouTube, said in a statement.

Google Preferred features YouTube’s most popular content in packages for sale to advertisers. Paul, 22, is one of YouTube’s top content creators, regularly drawing millions of views from his mainly youth-orientated audience.

Paul also had projects in the works with YouTube’s premium subscription service, YouTube Red, and appeared on the platform’s web series “Foursome.”

Representatives for Paul did not immediately return requests from Reuters for comment.

Paul apologized in a YouTube video titled “So Sorry” last week for posting the video that showed him and his friends laughing about the body they filmed hanging on a tree in Japan’s “suicide forest.”

Paul said he had made a “huge mistake” and was ashamed of himself, and he deleted the video after it caused a social media backlash.

YouTube in an open letter on Tuesday said it was “upset by the video that was shared last week,” saying that “suicide is not a joke, nor should it ever be a driving force for views.”

The company said Paul’s video violated its guidelines and it was “looking at further consequences.”

Paul has not posted any videos in the past week, saying he was “taking time to reflect.”

Paul’s channel, Logan Paul Vlogs, which has more than 15 million subscribers, is still active on YouTube and advertisers can still choose to advertise on his videos, or they can opt out.

(Reporting by Piya Sinha-Roy; Editing by Leslie Adler)

Spiders and fleas pack Albert Hall as Cirque du Soleil’s Ovo hits London

FILE PHOTO – Canada’s Cirque du Soleil perform a preview of their new show ‘OVO’ (meaning egg in Portugese) – A teeming world of insects, in Montreal April 7, 2009. OVO will have its world premiere in Montreal on May 8, 2009 and will travel to Quebec City and Toronto before touring the USA. REUTERS/Christinne Muschi

LONDON (Reuters) – London’s Royal Albert Hall was crawling with spiders, crickets, ants and fleas on Wednesday as Cirque du Soleil brought its insect-themed show Ovo to the famous venue for the first time.

‘Ovo’, which means egg in Portuguese, is about a day in the life of a community of 17 insects – portrayed by humans, not by insects – and how they cope with the arrival of a mysterious egg and the foreigner inside.

The show features eye-catching aerial displays to vibrant South American musical rhythms and is the 25th live production from Cirque du Soleil, the one-time Canadian street performer troupe that grew into a global circus and entertainment colossus.

Artistic director Tim Bennett said the show, which has been seen by over 5 million people since its premiere in Montreal eight years ago also carried an important message about social inclusion.

“It’s an insular colony of insects into which walks a foreigner, and he’s initially rejected because he’s different,” Bennett told Reuters.

“As they get to know him they realize that he’s actually much more similar to them than he is different.”

Ovo opens on Wednesday and runs for eight weeks.

(Reporting by Sarah Mills; Writing by Patrick Johnston; Editing by Hugh Lawson)

Actor Michael Douglas makes pre-emptive move to deny sexual misconduct

Actor Michael Douglas arrives for the Chaplin Awards at the Film Society of Lincoln Center in the Manhattan borough of New York, U.S. May 8, 2017. REUTERS/Carlo Allegri

LOS ANGELES (Reuters) – Oscar winning actor Michael Douglas has issued a pre-emptive denial of a sexual misconduct accusation, saying he wanted to get ahead of a potential story being investigated by Hollywood publications.

In a lengthy interview with entertainment industry website, published late on Tuesday, Douglas denied that he had masturbated in front of a woman who worked for him about 32 years ago.

“This is a complete lie, fabrication, no truth to it whatsoever,” Douglas said.

The accusation by the unidentified woman has not been published but Douglas said he had been informed by his attorneys in December that The Hollywood Reporter and other publications were investigating her claim.

“I felt the need to get ahead of this,” Douglas, 73, told Deadline.

“I had the choice of waiting for a story to come out, one that will clearly get picked up by other newspapers and magazines, and then I have to sit there and try to defend myself.”

The double Oscar-winner is the second celebrity to get his version of events out before being publicly accused of sexual impropriety in a scandal that has rocked Hollywood and led to many men being fired or cut out of projects.

Documentary filmmaker Morgan Spurlock posted a social media message last month saying he was “part of the problem,” saying he had in the past been accused of rape and had settled a sexual harassment lawsuit.

Douglas told Deadline he had been informed by his attorney that the woman also accused him of using coarse language around her, but not to her, and claimed that he had “blackballed” her in the industry after firing her.

The actor denied blackballing the women but admitted using “colorful language” in conversations with friends in his home and office.

Douglas said he supported the #MeToo movement by those breaking their silence over past sexual harassment, and that he had the support of his wife, actress Catherine Zeta-Jones, and his children.

Representatives of the actor did not respond on Wednesday to a Reuters request for further comment.

(Reporting by Jill Serjeant)

Fans shake, rattle and roll at Australia’s Elvis festival

An Elvis Presley impersonator talks on his phone before boarding the Elvis Express train at Sydney’s Central station before it departs for the 26th annual Elvis Festival being held in the New South Wales town of Parkes in Australia, January 11, 2018. REUTERS/Daniel Munoz

SYDNEY (Reuters) – Hundreds of hip-shaking and wig-wearing Elvis Presley lookalikes and fans of the late King of Rock and Roll took trains from Sydney bound for Australia’s annual Elvis festival on Thursday.

Strains of “I Was The One” rang out along the platforms of Sydney’s Central railway terminal as jumpsuited, coiffed and guitar-wielding passengers boarded the “Elvis Express” and “Blue Suede Express” bound for the country town of Parkes, some 357 km (222 miles) westward.

“Elvis is close to my heart because we grew up with Elvis in India,” Alfred Vaz, who dressed in a blue flared jumpsuit and also goes by his stage name of Bollywood Elvis, or Raja, told Reuters television beside the locomotive.

“From a very little kid, we always used to gyrate and try sing Elvis like: One for the money, two for the show,” he said, launching in to a rendition of “Blue Suede Shoes”.

During the six-hour train trip over mountains and through wheatfields and grazing pastures, Elvis tribute artists will entertain the passengers.

The festival, in its 26th year, is expected to attract about 25,000 people to Parkes, more than doubling its population for the duration of the four-day event.

The focus this year is on celebrating 50 years since Presley’s 1968 “comeback special,” an intimate and unplugged show credited with reviving his then-flagging recording career.

Street markets, lookalike contests, parades, a car show, displays of Presley artefacts and tribute performances are planned.

“It’s a must for all Elvis fans,” said tribute artist Kingsley Rock, whose website promises: “If you want the King to sing at your thing, give me a ring.”

“Its just one big party and everyone there loves Elvis, why wouldn’t you not come back year after year,” he told Reuters.

(Reporting by Jill Gralow and James Redmayne. Writing by Tom Westbrook, Editing by Michael Perry)

With a lower tax bill in sight, Walmart to raise its U.S. minimum wage

FILE PHOTO: A Walmart employee helps a customer navigate a flyer at the store in Broomfield, Colorado November 28, 2014. REUTERS/Rick Wilking/File Photo

By Nandita Bose

NEW YORK (Reuters) – Walmart Stores Inc will raise entry-level wages for U.S. hourly employees to $11 an hour in February as it benefits from last month’s major overhaul of the U.S. tax code, the company said on Thursday.

Walmart, the world’s largest retailer and private employer, said it would also offer a one-time cash bonus, based on length of service, of up to $1,000, and expand maternity and parental leave benefits.

The pay increase, Walmart’s third minimum wage increase since 2015, and bonus will benefit more than 1 million U.S. hourly workers, it said.

Walmart’s announcement follows companies like AT&T Inc, Wells Fargo & Co and Boeing Co, which have all promised more pay for workers after the Republican-controlled U.S. Congress passed a tax bill that slashed the corporate tax rate to 21 percent from 35 percent.

President Donald Trump and his fellow Republicans have argued that the corporate tax cut, part of the biggest overhaul to the U.S. tax code in 30 years, will benefit workers and lead to more investment by U.S. companies.

Walmart is likely to save billions of dollars from the new tax bill. Retailers, in general, have one of the highest average effective tax rates because a majority of their operations are in the United States.

It will also help the retailer attract workers at a time when the U.S. unemployment rate is low – currently 4.1 percent – and so competition for low wage workers is rising.

Walmart said the new tax law will create “some financial benefit for the company” and that is it is in the early process of assessing additional investments.

“We are in the early stages of assessing the opportunities tax reform creates for us,” President and Chief Executive Officer Doug McMillon said in a statement. The tax law gives the retailer an opportunity to be more competitive globally and to accelerate investment plans for the United States, he said.

Walmart employs about 2.2 million people globally, with more than 1.5 million in the United States, and had total global revenue of nearly $500 billion last year.

The increase in wages will cost approximately $300 million on top of wage hike plans that had been included in next fiscal year’s plans, the company said.

The hike will also increase the average hourly pay at Walmart for full-time employees to $14.50 from a current $13.85. The payscale for hourly workers will be from $11 to $24.70 per hour, the company said.

The company raised its minimum wage to $9 an hour in 2015. In 2016, it said employees who finished an internal training program would be eligible for $10 an hour. The retailer has spent about $2.7 billion to increase wages over the past few years.

The company is offering a one-time bonus to full and part-time employees based on their length of service, rising to $1000 for employees with 20 years of service. The one-time bonus will amount to $400 million in the current fiscal year and the company will take a one-time charge in the fourth-quarter of the current fiscal year to account for the charge.

Shares of the company were down 0.52 percent at $99.15 in early trade.

(Reporting by Nandita Bose; Editing by Lisa Von Ahn and Frances Kerry)

California rescuers keep up search for missing in deadly mudslide

A home on Glen Oaks Road damaged by mudslides in Montecito, California, U.S., January 10, 2018. Kenneth Song/Santa Barbara News-Press via REUTERS

By Rollo Ross and Alan Devall

SANTA BARBARA, Calif. (Reuters) – Southern California rescue workers using dogs and scanners searched for eight people feared lost in the wreckage of this week’s deadly mudslides, which struck along the state’s picturesque coastal communities, according to officials.

Seventeen people were confirmed dead after a wall of mud roared down hillsides two days earlier in the scenic area between the Pacific Ocean and the Los Padres National Forest, according to Santa Barbara County authorities. The mudslides destroyed about 100 homes and injured 28 people.

“We have crews out there,” said Amber Anderson, a spokeswoman for the Santa Barbara County Fire Department. “They’ve been working 24 hours a day.”

About 500 rescuers using search dogs, military helicopters, and thermal imaging equipment were on the scene. On Wednesday, dogs helped crews rescue 10 stranded residents, Anderson said. Rescues were partly reflected in the tally of missing, which was revised to eight from 17 on Thursday morning.

Search and rescue efforts have been slow as crews have to navigate through waist-deep mud, fallen trees, boulders and other debris. Teams have completed initial searches of the entire debris field and are about a quarter of the way through a more intensive secondary search of the zone, Anderson said.

“Another tough day in Santa Barbara County as Search and Rescue, Fire and Law Enforcement personnel from across our county and our neighboring counties searched for survivors and evacuated people,” the sheriff’s office said on its Twitter feed late Wednesday night.

The mudslides, triggered by heavy rains early on Tuesday, roared into valleys denuded by historic wildfires that struck the area last month.

In addition to destroying 100 homes, the debris flow from the mudslides has damaged hundreds of other structures, officials said.

Among the damaged properties were historic hotels and the homes of celebrities, including media mogul and actress Oprah Winfrey and talk-show host Ellen DeGeneres, who both live in the upscale hillside community of Montecito.

DeGeneres said on her talk show on Thursday that the picturesque town of 9,000 is a “tight-knit” community.

“It’s not just a wealthy community, it’s filled with a lot of different types of people from all backgrounds,” she said. “And there are families missing, there are people who are missing family members … it’s catastrophic.”

Last month’s spate of wildfires, including the largest in California history, not only burned away grass and shrubs that held soil in place, but also baked a waxy layer into the earth that prevents water from sinking deeply into the ground.

“First we got burned out at our ranch that caught on fire and now we’re flooding, so the last month has been pretty bad,” Charles Stoops said as he stood in front of his house, which was surrounded in mud 3 feet (nearly a meter) deep.

(Additional reporting by Keith Coffman in Denver, Alex Dobuzinskis and Dan Whitcomb in Los Angeles, Sharon Bernstein in Sacramento and Peter Szekely in New York; Writing by Scott Malone and Dan Whitcomb; Editing by William Maclean and Jonathan Oatis)

U.S. immigration operation targets 7-Eleven stores in 17 states

Thomas Homan addresses the daily briefing at the White House in Washington, U.S. July 27, 2017. REUTERS/Jonathan Ernst

By Bernie Woodall

(Reuters) – U.S. immigration agents fanned out to nearly 100 7-Eleven convenience stores nationwide on Wednesday, arresting 21 people suspected of being in the country illegally and giving owners a tight deadline to prove other employees are authorized to work.

The operation was the largest worksite enforcement by U.S. Immigration and Customs Enforcement, or ICE, since Republican President Donald Trump took office last January, agency spokeswoman Danielle Bennett said in an email.

“Today’s actions send a strong message to U.S. businesses that hire and employ an illegal workforce: ICE will enforce the law, and if you are found to be breaking the law, you will be held accountable,” ICE Deputy Director Thomas Homan said in a statement.

Taking a harder line on illegal immigration, including building a wall at the border with Mexico, was a touchstone for Trump during the 2016 election campaign.

At a White House meeting on Tuesday, Trump urged lawmakers to quickly reach a bipartisan deal on a program for “Dreamers,” people who came to the country illegally as children, before moving on to a comprehensive immigration bill.

“Notices of inspection” were delivered on Wednesday to 98 7-Eleven stores in 17 states and the District of Columbia beginning at 6 a.m. in each local time zone. Owners and managers have three business days to produce documents showing their employees are in the country legally or they could face civil and criminal penalties, ICE said.

The states where the employment audit notices were served were California, Colorado, Delaware, Florida, Illinois, Indiana, Maryland, Michigan, Missouri, Nevada, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Texas and Washington, ICE said.

The company said in an emailed statement that the ICE actions were taken at franchised stores, whose owners and not the company are responsible for making hiring decisions based on compliance with federal, state and local laws. That includes verifying immigration status, 7-Eleven said.

Based in Irving, Texas, 7-Eleven has 60,000 convenience stores in 18 countries, including 8,500 in the United States, according to its website.

The federal operation was a follow-up to the 2013 arrests of nine 7-Eleven franchise owners and managers, ICE said in a statement. Those owners were accused of hiring employees living illegally in the United States and giving them identities stolen from U.S. citizens.

The 21 people who were “administratively arrested” on Wednesday on suspicion of being in the country illegally were given notices to appear in immigration court and could be deported.

(Reporting by Bernie Woodall in Fort Lauderdale, Fla.; Editing by Colleen Jenkins and Peter Cooney)

Trump administration will allow states to test Medicaid work requirements

FILE PHOTO – U.S. President Donald Trump attends the Women in Healthcare panel hosted by Seema Verma (R), Administrator of the Centers for Medicare and Medicaid Services, at the White House in Washington, U.S., March 22, 2017. REUTERS/Kevin Lamarque

By Yasmeen Abutaleb

WASHINGTON (Reuters) – The Trump administration said on Thursday it would allow states to test requiring some Medicaid recipients to work or participate in community activities such as volunteering or jobs training as a condition of eligibility for the government health insurance program for the poor.

The Centers for Medicare and Medicaid Services issued guidance making it easier for states to design and propose test programs that implement such requirements. States must propose such changes through waivers and receive federal approval.

Seema Verma, the agency’s administrator, said the policy guidance came in response to requests from at least 10 states that have proposed requiring some Medicaid recipients to work or participate in activities that may include skills training, education, job search, volunteering or caregiving. Those states include Kentucky, Maine, New Hampshire, Arizona, Indiana and Utah.

Certain Medicaid populations would be exempt from the rules, including those with disabilities, the elderly, children and pregnant women. Verma also said states would have to make “reasonable modifications” for those battling opioid addiction and other substance use disorders.

“This gives us a pathway to start approving waivers,” Verma said on a call with reporters on Wednesday. “This is about helping those individuals rise out of poverty.”

Under the 2010 Affordable Care Act, former Democratic President Barack Obama’s signature domestic policy achievement commonly known as Obamacare, 31 states expanded Medicaid to those making up to 138 percent of the federal poverty level, adding millions of people to the rolls.

Republicans have repeatedly failed to repeal and replace Obamacare, a top campaign promise of President Donald Trump. Instead, the Trump administration has sought to weaken the program through executive orders and administrative rules.

The Obama administration opposed state efforts to implement work requirements in Medicaid because it could result in fewer people having access to health insurance.

For instance, Kentucky last year proposed work requirements for able-bodied adults to get insurance and establishing new fees for all members based on income. A study found the proposal would reduce the number of residents on Medicaid by nearly 86,000 within five years, saving more than $330 million.

Republicans argue that Medicaid was created to serve the most vulnerable and has become bloated under Obamacare. Verma and other Republicans said implementing work and community engagement requirements could help improve health outcomes by connecting people with jobs and training.

(Reporting by Yasmeen Abutaleb; Editing by Peter Cooney)

House urged to cancel vote on NSA spying after Trump tweets

FILE PHOTO: A man is silhouetted near logo of the U.S. National Security Agency (NSA) in this photo illustration taken in Sarajevo March 11, 2015. REUTERS/Dado Ruvic/File Photo

By Dustin Volz

(Reuters) – Senior Democrats in the U.S. House of Representatives urged cancellation of a vote set for Thursday on whether to renew the National Security Agency’s warrantless internet surveillance program after President Donald Trump appeared to initially question the merits of the program.

Republican Representative Steve Scalise issued a statement saying the Republican majority had no plans to cancel the vote.

The unusual request from Democrats created confusion on Capitol Hill and cast further doubt on the already uncertain fate of an effort to renew an expiring national security tool.

The vote would be the culmination of a yearslong debate in Congress on the proper scope of U.S. intelligence collection, one fueled by the 2013 disclosures of classified surveillance secrets by former NSA contractor Edward Snowden. The provisions have been the target of privacy advocates who want to limit its impact on Americans.

Trump initially said on Twitter that the surveillance program had been used against him but later said it was needed.

House Democratic Leader Nancy Pelosi asked Speaker Paul Ryan, a Republican, to cancel the vote after Trump’s tweets, a senior aide said.

Some conservative, libertarian-leaning Republicans and liberal Democrats attempted to persuade colleagues to include more privacy protections. But the effort to include a warrant requirement before the NSA or other intelligence agencies could scrutinize communications belonging to Americans whose data is incidentally collected under the program failed on Thursday on that split party lines.

The House then moved to consider the entire legislative package renewing the Foreign Intelligence Surveillance Act, known as FISA, that covers the program.

The bill would extend the NSA’s spying program for six years with minimal changes. Most lawmakers expect it to become law if it prevails in the House, although it still would require Senate approval and Trump’s signature.

In a Thursday tweet, Trump contradicted the official White House position and renewed unsubstantiated allegations that the previous administration of Barack Obama improperly surveilled his campaign during the 2016 election.

“This is the act that may have been used, with the help of the discredited and phony Dossier, to so badly surveil and abuse the Trump Campaign by the previous administration and others?” the president said in an early morning post on Twitter.


The White House did not immediately respond to a request to clarify Trump’s tweet but he posted a clarification less than two hours later.

“With that being said, I have personally directed the fix to the unmasking process since taking office and today’s vote is about foreign surveillance of foreign bad guys on foreign land. We need it! Get smart!” Trump tweeted.

Unmasking refers to the largely separate issue of how Americans’ names kept secret in intelligence reports can be revealed.

Asked by Reuters at a conference in New York about Trump’s tweets, Rob Joyce, the top White House cyber official, said there was no confusion within Oval Office about the value of the surveillance program and that there have been no cases of it being used improperly for political purposes.

The White House, U.S. intelligence agencies and Republican leaders in Congress have said they consider the tool indispensable and in need of little or no revision.

Without congressional action, legal support for Section 702 of the Foreign Intelligence Surveillance Act, which authorizes the program, will expire next week, although intelligence officials say it could continue through April.

Section 702 allows the NSA to eavesdrop on vast amounts of digital communications from foreigners living outside the United States through U.S. companies such as Facebook Inc <FB.O>, Verizon Communications Inc <VZ.N> and Alphabet Inc’s <GOOGL.O> Google.

The spying program also incidentally scoops up communications of Americans if they communicate with a foreign target living overseas, and can search those messages without a warrant.

(Reporting by Dustin Volz; Additional reporting by David Shepardson, Patricia Zengerle and Richard Cowan; Editing by Lisa Von Ahn and Bill Trott)

U.S. producer prices fall; jobless claims up for fourth straight week

FILE PHOTO: A woman shops for produce inside a Whole Foods Market in the Manhattan borough of New York City, New York, U.S. June 16, 2017. REUTERS/Carlo Allegri/File Photo

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. producer prices fell for the first time in nearly 1-1/2 years in December amid declining costs for services, which could temper expectations that inflation will accelerate in 2018.

Other data on Thursday showed the number of Americans filing for unemployment increasing for the fourth straight week to more than a three-month high. That probably does not signal weakness in the labor market as bitter cold and snow in parts of the country likely kept some workers at home.

Still, weak inflation at the producer level could add to concerns that the factors restraining inflation could become more persistent and result in the Federal Reserve being more cautious about raising interest rates this year.

The Labor Department said on Thursday its producer price index for final demand slipped 0.1 percent last month. That was the first drop in the PPI since August 2016 and followed two straight monthly increases of 0.4 percent.

In the 12 months through December, the PPI rose 2.6 percent after accelerating 3.1 percent in November. Economists polled by Reuters had forecast the PPI rising 0.2 percent last month and increasing 3.0 percent from a year ago.

A key gauge of underlying producer price pressures that excludes food, energy and trade services edged up 0.1 percent last month. The so-called core PPI increased 0.4 percent in November. It rose 2.3 percent in the 12 months through December. The core PPI was up 2.4 percent in the 12 months through November.

The PPI data came on the heels of a report on Wednesday showing a sharp moderation in import prices in December. Economists are hoping that a tightening labor market and recent weakness in the dollar will lift inflation toward the Fed’s 2 percent target this year.

The U.S. central bank’s preferred inflation measure, the personal consumption expenditures (PCE) price index excluding food and energy, has undershot its target since May 2012. The greenback lost 7 percent of its value against the currencies of the United States’ main trading partners last year.

The Fed raised interest rates three times in 2017. Its forecast of three rate hikes for this year will depend on the inflation outlook.

The dollar <.DXY> fell to a session low against a basket of currencies after the data. Prices of U.S. Treasuries were trading lower while U.S. stock index futures were marginally higher.


Last month, the price of services fell 0.2 percent after rising for nine straight months. That reflected a 10.7 percent drop in margins for automotive fuels and lubricants retailing.

Wholesale food prices recorded their biggest drop since May, while energy prices were unchanged. The cost of healthcare services increased 0.2 percent last month after being unchanged in November. Those costs feed into the core PCE price index.

In a second report on Thursday, the Labor Department said initial claims for state unemployment benefits increased 11,000 to a seasonally adjusted 261,000 for the week ended Jan. 6, the highest level since late September. Economists had forecast claims falling to 245,000 in the latest week.

A large part of the country faced frigid temperatures and snow during the first week of 2018, likely making it hard for some people to report for work. Unadjusted claims for New York rose by 27,170 last week, more than half of the national total.

Claims have risen since mid-December, though the data tend to be volatile during year-end holidays.

Last week marked the 149th straight week that claims remained below the 300,000 threshold, which is associated with a strong labor market. That is the longest such stretch since 1970, when the labor market was much smaller.

The labor market is near full employment, with the jobless rate at a 17-year low of 4.1 percent. Last week, the four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 9,000 to 250,750.

The continuing low level of claims suggests a strong labor market. The pace of job growth is, however, expected to slow this year as the labor market hits full employment. Nonfarm payrolls increased by 148,000 jobs in December after surging by 252,000 jobs in November.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

Chances of U.S. leaving NAFTA must be taken seriously: Canada

FILE PHOTO: Flags are pictured during the fifth round of NAFTA talks involving the United States, Mexico and Canada, in Mexico City, Mexico, November 19, 2017. REUTERS/Edgard Garrido/File Photo

LONDON, Ontario (Reuters) – The United States must be taken seriously when it says it might walk away from NAFTA, Canada’s foreign minister said on Thursday, a day after government sources said Ottawa was increasingly convinced U.S. President Donald Trump would pull the plug.

Chrystia Freeland also told reporters that Canada had come up with some creative ideas in a bid to solve the toughest challenges facing negotiators when they meet for the sixth and penultimate round of talks to modernize the North American Free Trade Agreement later this month.

Trump has repeatedly threatened to walk away from the 1994 pact between the United States, Canada and Mexico unless major changes are made.

“The United States has been very clear since before the talks started that … (this) was a possibility and I think we need to take our neighbors at their word, take them seriously, and so Canada is prepared for every eventuality,” Freeland told reporters on her way to a two-day cabinet meeting.

Freeland also said it was “absolutely possible to have a positive outcome” at the Jan. 23-28 talks in Montreal if all three sides showed good will.

The Canadian and Mexican currencies, as well as stocks of firms that rely heavily on North America’s integrated economy, fell on Wednesday after government sources told Reuters they saw an increased likelihood of a U.S. withdrawal.

(Reporting by David Ljunggren; Editing by Chizu Nomiyama and Andrea Ricci)

Lagging industry, Ford puts auto emergency brakes on two 2019 models

FILE PHOTO: The Ford Motor Company logo is pictured at the Los Angeles Auto Show in Los Angeles, California, U.S., November 30, 2017. REUTERS/Mike Blake/File Photo

(Reuters) – Ford Motor Co <F.N> said on Thursday it will make automatic emergency brakes standard on two key 2019 models, an effort by the No. 2 U.S. automaker to catch up with rivals in offering the new technology designed to help vehicles avoid collisions.

Ford will fit the brakes on its redesigned 2019 Edge midsize crossover vehicle and its new 2019 Ranger midsize pickup, that will compete later this year with the Chevrolet Colorado and Toyota Tacoma.

The brakes are part of a suite of standard safety features on the new Edge, Ford said, including technology that detects objects and pedestrians and can prevent collisions by automatically braking and steering for the driver.

The 2019 Edge, which goes on sale this summer, will also offer new optional safety features, including a more sophisticated cruise control system as well as automatic steering assist to help avoid potential crashes.

In an update last month, the U.S. National Highway Traffic Safety Administration said four of 20 automakers in 2017 equipped at least half of their U.S. models with standard automatic emergency brakes, with the highest installation rates for luxury brands such as Tesla Inc <TSLA.O> and Daimler AG’s <DAIGn.DE> Mercedes-Benz.

Among mass-market companies, Toyota Motor Corp <7203.T> fitted the devices to 56 percent of its 2017 fleet, compared with 30 percent for Honda Motor Co <7267.T>, 20 percent for General Motors Co <GM.N> and less than 10 percent for Ford.

Overall, 20 carmakers have agreed to equip virtually all of their new passenger vehicles with automatic emergency brakes by September 2022, NHTSA said.

In an interview, Raj Nair, president of Ford’s North American operations, said the company plans to be “more aggressive” in standardizing features that assist drivers. He declined to say when Ford planned to make automatic emergency brakes standard on all its U.S. models.

(Reporting by Paul Lienert in Detroit; Editing by Bill Rigby)

Olympics: United States embraces technology to bridge funding gap

A U.S. freeskier unveils the official competition uniform designed by North Face for the U.S. Freeskiing Team at the Olympic Winter Games PyeongChang 2018 during an event in New York City, U.S., October 30, 2017. REUTERS/Brendan McDermid

By Jack Tarrant

LONDON (Reuters) – The United States may have claimed at least nine gold medals in each of the last four Winter Olympics, yet remarkably, all of this success has been achieved without government funding.

Unlike many nations who will compete against them in Pyeongchang next month, the United States Olympic Committee and the programs they support receive no financial assistance from the country’s administration.

This lack of funding has forced coaches involved in the training and preparation of American Olympic athletes to look elsewhere to gain any competitive advantage.

Mike Jankowski, known by many as ‘Coach Janks’, is the head coach for the U.S. snowboard and freeskiing team. Since he took over this role, Jankowski has guided athletes, including Shaun White and Hannah Jeter, to 19 Olympic medals.

Jankowski attributes this success to a variety of reasons, including teamwork, access to facilities and raw talent.

Yet he also argues that embracing innovations in technology to improve the coaching experience for athletes under his wing has proved invaluable in gaining the edge on the slopes.

Speaking at a team training camp in Austria, Jankowski said it was crucial coaches allowed athletes to express themselves in a sport that rewards creativity and flair.

“There is not just one way to do these tricks up there. Putting your own flavour on it, putting your stamp on it is absolutely key to impressing the judges,” Jankowski said at the team hotel in Stubai.

Up at the ski park, Jankowski’s high-tech operation was there for all to witness.

All the coaches possess camera skills to record an athlete’s trick from a variety of angles. This footage is then relayed instantly, using live transmission to a set of receivers at the top of the slope, then onto the athletes’ tablet and phone.


Therefore, when an athlete returns to the top of the slope they can immediately view and analyze their previous run.

“They can also see what their competitors are doing, what their team mates are doing. We are recording all the time and sending that live feedback up there and it has absolutely been a game changer for us,” Jankowski enthused.

Jankowski believes these innovations have significantly improved the prospects of American skiers and snowboarders, and helped bridge the gap in funding.

His program relies on donations and sponsorship for 100 percent of its funding, leading to some within U.S. skiing and snowboarding to look enviously at countries such as Great Britain, who receive millions in government assistance.

In preparation for the 2018 Games, UK Sport — a British government organization — and the National Lottery have contributed more than five million pounds ($6.74 million) to winter sports programs, including skiing and snowboarding.

Instead of being bitter, however, Jankowski sees this disparity as a challenge.

“We are fortunate to have the situation that we have,” he added.

“It is challenging, no question, but at the same time it makes you feel better because you are giving back to those partners, to those donors, who have been giving back to you when you bring back the medals.”

Taking medals back to the United States is something Jankowski and the rest of his team have done on a consistent basis. With the help of technology and incremental improvement, they hope to do the same in 2018.

($1 = 0.7414 pounds)

(Reporting by Jack Tarrant; Editing by John O’Brien)

Zverev must be patient, says Becker

FILE PHOTO: Tennis – ATP World Tour Finals – The O2 Arena, London, Britain, November 14, 2017. Germany’s Alexander Zverev in action during his group stage match against Switzerland’s Roger Federer. Action Images via Reuters/Tony O’Brien/File Photo

By Martyn Herman

(Reuters) – Boris Becker was a man in a hurry when he took Wimbledon by storm to win the title as a precocious 17-year-old in 1985 but says today’s game requires a little more patience.

Alexander Zverev, Germany’s latest tennis hope and the man many predict can go some way to emulating Becker’s feats, found that out last year when, despite rising to fourth in the world rankings, the grand slams proved frustrating.

A third-round defeat in the Australian Open by Rafael Nadal in five sets was nothing to be ashamed of and he also made the second week of Wimbledon, reaching the last 16.

But at the U.S. Open, when he was being lauded a potential champion, he buckled under the expectations and blew out in the second round to fellow youngster Borna Coric, playing what he described as his worst match of the season.

He will arrive in Melbourne as the fourth seed for the Australian Open, but Becker has urged caution, saying Zverev needs to be ready to play the long game.

“For him the important thing is to get comfortably into the second week, get to the quarter-final and feel good about his game and then he will be very dangerous,” Becker, who will be working as an analyst for Eurosport during the tournament, told Reuters by telephone.

“The tough thing when you are young is that you don’t have any patience. You want it to happen yesterday. Playing a grand slam over two weeks is tough for a 20-year-old to keep the concentration and keep the rhythm going.

“It’s easier when you’re older and you have done it before. When you are 19 or 20 you want to play the final tomorrow!

“But it’s a two-week process.”

Becker, who stormed past Kevin Curren to win Wimbledon in 1985 and went on to win a total of six grand slams and top the rankings, is confident that Zverev will win a major.

“He has all the tools,” he said. “He has shown last year when he won two Masters beating Novak (Djokovic) in one final and Roger (Federer) in another, which is as hard as it gets,” Becker said.

“He has the quality to do it over a week, but needs a bit more experience to do it over two weeks.”

Zverev, who could face his older brother Mischa in the third round, is one of a number of rising stars who are trying to dislodge one of the greatest men’s generations ever.

Becker believes Australian Nick Kyrgios is beginning to show the mentality to have a deep run in Melbourne.

Blocking the way though is the 36-year-old reigning champion Federer who shows no sign of being ready to hand over power.

“He must be celebrated and enjoyed because we’ll never see a player like him again, at least not in my lifetime,” Becker said.

“What I hope is that he, Nadal, Djokovic and (Andy) Murray are all still at the top when the 20 somethings take over, not after they have declined.”

(Reporting by Martyn Herman, editing by Pritha Sarkar)

Non-Russian airlines to operate internal charter flights for World Cup

FILE PHOTO: Russian Transport Minister Maxim Sokolov waits before an annual state of the nation address attended by Russian President Vladimir Putin at the Kremlin in Moscow, Russia, December 1, 2016. REUTERS/Maxim Shemetov

MOSCOW (Reuters) – Foreign airlines will be allowed to carry out a limited number of charter flights between Russian cities during the World Cup in June and July, Russian Transport Minister Maxim Sokolov said on Thursday.

Currently, only large foreign air carriers are allowed to fly from outside Russia and into the country along the routes agreed with the ministry.

Sokolov said that foreign air carriers will perform intra-Russian flights to “ease peak traffic” only when domestic airlines are unable to carry passengers with a comparable price, at the same time and under the same terms to the same destinations.

He said between 3 million to 5 million fans will travel during the World Cup, which will be held in 11 host cities from Kaliningrad in the west to Ekaterinburg, 2,500km away in the east, and Sochi on the Black Sea.

Russian Railways plans to transport around 500,000 fans for free in 400 trains during the tournament.

Aeroflot will be the principal air carrier, which will take care of around 40 percent of all traveling fans expected to attend the 64 matches that will be staged during the June 14 to July 15 tournament.

(Reporting by Gleb Stolyarov; writing by Vladimir Soldatkin, editing by Pritha Sarkar)

Philippines exhumes bodies of two children in dengue vaccine probe

FILE PHOTO: Concepcion Yusop, a national immunization program manager, shows an anti-dengue vaccine Dengvaxia inside a vaccine storage room in Sta. Cruz city, Metro Manila, Philippines December 4, 2017. REUTERS/Romeo Ranoco/File Photo

MANILA (Reuters) – A Philippine government agency on Thursday exhumed the bodies of two children whose parents suspect they died of dengue after receiving a new vaccine against the disease, although its maker said it was not known to have caused any deaths in the country.

More than 800,000 Filipino children aged nine or more received Dengvaxia last year in a government immunization drive against the mosquito-borne tropical disease that kills about 20,000 people a year.

The Department of Health (DOH) stopped using Dengvaxia last month after its maker, Sanofi Pasteur, said the vaccine itself may in some cases increase the risk of severe dengue in recipients not previously infected.

One of the two exhumed bodies showed signs of excessive bleeding, said officials of the Public Attorney’s Office (PAO), which provides free legal assistance to the poor.

PAO forensic expert Erwin Erfe said bleeding was observed on the scalp of the second body.

“Bleeding is a prominent symptom of dengue,” Erfe told Reuters by telephone.

PAO is also investigating the deaths of five other children who received Dengvaxia and initial findings reveal a pattern in how they died, PAO chief Persida Acosta said.

“There was bleeding in the vital organs, the lungs, heart, liver, kidney, brain,” Acosta told Reuters. “These are all compatible with hemorrhagic shock.”

She said the PAO had received numerous requests to exhume bodies after the government launched its investigation.

The DOH said it would look at the findings. The DOH has also submitted cases involving the deaths of 14 children who received Dengvaxia to a review panel of doctors from a state university and a state-owned hospital.

While Dengvaxia is the first-ever approved vaccine for dengue, scientists had recognized it was imperfect and did not protect equally against the four different types of the virus in clinical tests.

A new analysis from six years of clinical data showed Dengvaxia provided persistent protective benefit against dengue fever in those who had prior infection.

But those not previously infected could suffer more severe symptoms in the long term, following vaccination upon a subsequent dengue infection, Sanofi has said.

“Up to this date, there has been no death established to have been causally linked to the dengue vaccine, not even among the 40,000 people involved in clinical trials conducted across 15 countries,” Sanofi said in a statement.

(Reporting by Karen Lema; Editing by Clarence Fernandez)

Thawed, fresh embryos work equally well in many women

Doctor Katarzyna Koziol injects sperm directly into an egg during in-vitro fertilization (IVF) procedure called Intracytoplasmic Sperm Injection (ICSI) at Novum clinic in Warsaw October 26, 2010. REUTERS/Kacper Pempel

By Gene Emery

(Reuters Health) – – Women with infertility unrelated to a common hormonal disorder may have more options when they try in-vitro fertilization, two large new studies show.

Whereas in women with polycystic ovary syndrome (PCOS), freezing and thawing embryos before implantation offers a better chance of pregnancy and birth, in women without this condition thawed embryos and are no better or worse than fresh embryos, researchers in China and Vietnam have found.

The findings may encourage doctors to just implant one embryo at a time, lowering the risks that come when doctors try to implant more, producing multiple births and their associated complications.

The papers, published in The New England Journal of Medicine, are “good news for women seeking in-vitro fertilization,” said Dr. Lan Vuong, chief author of the Vietnamese study.

After an earlier study by the Chinese team showed that frozen embryos were better for women with PCOS, “a lot of people jumped to the conclusion that we should always do frozen. Some programs around the country won’t do fresh transfers anymore,” said Dr. Christos Coutifaris of the University of Pennsylvania’s Perelman School of Medicine in Philadelphia, who was not connected with the new research.

“Now these two papers, equally large and done in non-PCOS patients, show that in terms of live birth, which is what we care about, there is no difference,” he told Reuters Health by phone. “So to apply the rule to everybody that we should freeze your embryos is probably not correct.”

Dr. Vuong said that in the past, doctors have often implanted more than one fresh embryo in women because of concerns that a frozen transfer may not work as well.

The fact that thawed embryos “produce the same pregnancy rate with less complications should transform the way in-vitro fertilization is practiced,” she told Reuters Health by email. “After the first fresh embryo transfer, it will be possible to freeze the remaining embryos and transfer them one by one, if necessary, without reducing the chance of pregnancy.”

Dr. Vuong, of the University of Medicine and Pharmacy at Ho Chi Minh City, and her colleagues also found that women with high levels of the female hormone progesterone might be better off receiving a thawed frozen embryo.

Dr. Coutifaris, who is president of the American Society for Reproductive Medicine, said a higher progesterone level may indicate that the development of the embryo and the womb are out of synch, and using a thawed embryo allows for better timing of the implantation.

It’s one example where “the challenge for us, as practitioners, is to determine who are the patients who will benefit from a freeze-only approach,” he said.

In the Chinese study of 2,157 women undergoing their first in-vitro fertilization cycle, the birth rate was 48.7 percent with thawed embryos and 50.2 percent with fresh. Doctors typically implanted two embryos per attempt.

In the Vietnam study of 782 women undergoing their first or second attempt, the live birth rates after the first transfer were 33.8 percent with frozen and 31.5 percent for fresh. They also implanted, on average, two at a time.

In both studies, the difference in birth rates between the groups was so small that it might have been due to chance.

Neither study found a higher risk of neonatal or obstetrical complications in either group, although frozen embryo transfer produced a statistically lower risk of over-stimulated ovaries, which leads to swollen and painful ovaries and is potentially dangerous.

The rates of the syndrome in the Chinese study were 0.6 percent with frozen embryos and 2.0 percent with fresh. The senior author was Dr. Zi-Jiang Chen of Shandong University, who did not respond to emailed questions.

It was the Chen group that, in 2016, reported that frozen-then-thawed embryos offered a 7-percentage-point edge when it came to producing live births among infertile women with polycystic ovary syndrome: 49 percent versus 42 percent. The improvement came primarily from a lower rate of pregnancy loss.

“The cost for freezing embryos is about 30 percent more than that for fresh transfer,” said Dr. Vuong. “However, the effectiveness of the treatment should be considered in decisions about which approach is more cost-effective. We have done a cost-effectiveness analysis of the two treatments and found that freezing embryos and subsequent transfer is not cost-effective over fresh transfer.”

SOURCES: and The New England Journal of Medicine, online January 10, 2018.

Smaller social network tied to bigger diabetes risk

A person receives a test for diabetes during Care Harbor LA free medical clinic in Los Angeles, California September 11, 2014. REUTERS/Mario Anzuoni/File Photo

By Lisa Rapaport

(Reuters Health) – – Socially isolated people may be more likely to develop diabetes than adults with closer ties to family and friends, a recent study suggests.

Loneliness has long been linked to a wide variety of physical and mental health problems, particularly among chronically ill and elderly people. With diabetes in particular, close friends and family can influence how patients eat, how much they exercise, and how well they keep the disease in check.

To see how these relationships may influence the odds of getting diabetes in the first place, researchers examined data on 2,861 adults who ranged in age from 40 to 75 and were 60 years old on average.

More than half of these people had normal blood sugar and no diagnosis of diabetes. But 430 people, or 15 percent, had slightly elevated blood sugar classified as “pre-diabetes,” while about 4 percent were newly diagnosed with diabetes when they joined the study and 24 percent already had the disease.

On average, people without diabetes had 11 friends and family members in their social network, compared with fewer than 8 friends for people with newly or previously diagnosed diabetes, researchers report in BMC Public Health.

“Currently, high-risk groups receive advice to become more physically active and eat healthier without any inquiries about their social situation,” said lead study author Stephanie Brinkhues, a researcher at Maastricht University in the Netherlands.

“We think that this could be improved . . . as socially isolated people may even have a higher risk for disease,” Brinkhues said by email.

Every one-person reduction in the size of people’s social networks was associated with 12 percent higher odds of newly diagnosed diabetes in women and 10 percent higher odds for men, the study found. This was also tied to 8 percent greater likelihood of a previous diabetes diagnosis in women, and 5 percent greater odds for men.

At the same time, each 10 percent drop in the number of social network members living within walking distance was associated with 21 percent higher odds of a new diabetes diagnosis for women.

Every 10 percent increase in the proportion of the social network made of household members, meanwhile, was associated with 25 percent higher odds of a new diabetes diagnosis in women and 29 percent higher odds for men.

Living alone didn’t appear to influence the odds of diabetes for women. But for men, living alone was associated with 84 percent higher odds of a new diabetes diagnosis and 94 percent higher odds of a previous diagnosis.

The study wasn’t a controlled experiment designed to prove whether or how the number of people in social networks or the types of interactions within networks might influence the risk of diabetes.

Even so, the study adds to the evidence linking social isolation to diabetes and other chronic illnesses that can impact both quality of life and longevity, said Dr. Carla Perissinotto, a geriatrics researcher at the University of California, San Francisco.

“Social isolation doesn’t cause diabetes, but there is a relationship,” Perissinotto, who wasn’t involved in the study, said by email.

One theory is that too much time alone might lead to increased stress and inflammatory reactions in the body, Perissinotto added. Stress hormones are thought to influence how the body processes glucose, or sugars, and may contribute to the development of diabetes.

The study results offer fresh evidence of the importance of maintaining an active social life in middle age and beyond, said Dawn C. Carr, a researcher at Florida State University in Tallahassee who wasn’t involved in the study.

People who have many close relationships with friends and family members may be more motivated to be socially engaged, physically active and follow a healthy lifestyle, Carr said by email.

By contrast, people who live alone may have less motivation to cook healthy meals, get out and exercise or do other things that can keep health problems at bay.

“We need to nurture important relationships and be sure that we take our social health as seriously as our physical and psychological health,” Carr advised. “This is something we need to cultivate throughout our lives before we reach old age.”

SOURCE: BMC Public Health, online December 19, 2017.

Many women uninformed about breast cancer surgery options

Pink balloons are displayed in front of an artificial waterfall during the “Pink Ribbon” breast cancer awareness campaign at Cheonggye Stream in central Seoul October 5, 2011. REUTERS/Jo Yong-Hak

By Lisa Rapaport

(Reuters Health) – – Women with breast cancer often feel rushed to make a decision about surgery, and some of them might benefit from more time and better educational materials to inform their treatment choices, two recent studies suggest.

One study surveyed 487 women after they underwent either a lumpectomy that removes malignant tissue while sparing the rest of the breast, a mastectomy that removes the entire breast, or both procedures.

Regardless of what path they took, at least one in five women said choosing quickly was more important than making an informed decision, and at least as many patients felt like they didn’t have all the facts before their operations.

“A breast cancer diagnosis can feel like an emergency when you are the patient,” said lead study author Dr. Sunny Mitchell, a breast surgeon in Stratford, Connecticut.

“There is actually plenty of time to review all treatment options since survival rates are very high for early-stage breast cancer and do not change if a woman starts treatment within a few weeks,” Mitchell said by email.

Most early-stage breast cancer patients have either a lumpectomy or a mastectomy, and many of them get chemotherapy or radiation afterward to destroy any remaining abnormal cells and reduce the risk of cancer coming back.

In the survey, only 47 percent of lumpectomy patients, 67 percent of mastectomy patients, and 28 percent of women who had both procedures said they felt completely informed before they had these surgeries, Mitchell and colleagues found.

A quick decision was more important than an informed decision for 35 percent of the lumpectomy patients, 31 percent of the mastectomy patients, and 22 percent of the women who had both procedures.

A separate study in the same journal offers one way to help women understand their options.

For that study, researchers randomly assigned 227 women newly diagnosed with breast cancer to use an online decision-making tool or to read materials available on websites run by groups like the American Cancer Society and the National Cancer Institute.

All of the women participated in the study before their first surgical consultation.

With the decision aid, half of the women scored at least 80 out of 100 on tests of their knowledge about breast cancer and treatment options, compared with a median score of 66 for women who reviewed material on various websites.

At the same time, 72 percent of the women who used the decision aid recognized that they could wait a few weeks to make an informed treatment choice without affecting their survival odds, compared with just 54 percent for the other women.

“Women benefit from receiving high-quality information about breast cancer prior to their first visit with a surgeon,” senior study author Dr. Heather Neuman, a researcher at the University of Wisconsin School of Medicine and Public Health in Madison, said by email.

Decision aids can help women clarify their personal values and preferences, for example by focusing on whether they want to avoid radiation or concentrate on preserving their breasts, said Dr. Clara Lee, a cancer researcher at The Ohio State University Wexner Medical Center in Columbus.

This process can also prepare women to talk to their provider about treatment options and make an informed decision, Lee, who wasn’t involved in the study, said by email.

Women can still make an educated choice, aided by information online, even when they don’t use a decision aid, Lee added.

“Women should look for information that presents multiple treatment options and the pros and cons of those options – not just the pros,” Lee advised. “Making a decision is about more than just information; it’s also about being clear on what is important to you and being prepared to discuss these things actively with your provider.”

SOURCES: and Journal of the American College of Surgeons, online December 12, 2017.

Highest paying college major: Petroleum engineering jobs

If starting at $96,000 a year – sounds like a good deal for a first job – then parents, here are two words to whisper to your young student as she or he heads off to college: “petroleum engineering.”

Not only is that a good deal, it turns out to be the best deal.  That would be tops among all college majors, as reported by U.S. News & World Report this week.  Petroleum engineers lead a pack of STEM-related (Science, Technology, Engineering, Mathematics) majors, when it comes to top paychecks.

That’s also a reflection of the transformation of the oil business – no more wildcatters and black gold gushers (even if we miss the old nicknames, like “Dry Hole Slick”). Today, it’s high tech and science that are driving oil exploration and production.

Oh, and in case you’re wondering where things go from that first payday, they go up. Mid-career, petroleum engineers pull in about $172,000.

Phillips 66 sets world record for power conversion efficiency

Most ice cream scoops balanced on a cone, highest jump by a llama, longest cat in the world, are all world records that have been broken. Tracking these records is The Guinness World Records, compiled annually, and in fact a world record holder itself as the best-selling copyrighted book of all time. From the unusual facts to the practical, many world records are broken each year.

A more practical world record, for power conversion efficiency, was set by energy manufacturing and logistics company, Phillips 66. Phillips 66 has accomplished the feat with its organic solar cells technology. A polymer-based organic photovoltaic (OPV) technology, the solar cells can be printed using low-cost manufacturing processes, and do not contain hazardous materials like lead or cadmium as is used in other technologies. This technology advances solar module development that is flexible, lightweight, and transparent.

Merl Lindstrom, Vice President of Technology at Phillips 66 stated that, “This breakthrough in efficiency brings us closer to the possibility of commercializing this promising form of solar technology, and continuing to increase the ability of OPV to convert power with high efficiency will one day make this energy source more affordable for the consumer.”

Phillips 66’s world record-holding solar cells came in with a 11.84 percent efficiency:  a world record and a meaningful step towards cost effective renewable electricity generation.

And, for the record: ice cream scoops on a cone is 121, highest jump by a llama is 3 feet 10 inches, and longest cat is 3x the size of the average cat at a whopping 3 feet 10.6 inches. Proving you really do learn something new every day!

Why wind and power depends on petroleum and natural gas

What keeps a wind turbine turning?

Yes, it’s a trick question.

You need a good breeze, of course – but there’s something else that’s essential, something that you might not associate with wind power. And that something, would be oil or natural gas.  Yep. Wind power depends on the hydrocarbon.

That’s because inside those turbines are gears, axles, a generator – all sorts of moving, turning parts – and moving parts need lubrication – and lubrication means oil.  Which shouldn’t be surprising.  Petroleum products are in all sorts of other products, including other sources of energy.

And those moving parts?  The windmill blades have been getting longer and longer, which is good for the work of catching the wind – but the only way to make blades like that, is through carbon-reinforced resins made from petrochemicals.

Wind power in the U.S. produces about 5.5% percent of our electricity these days, so long as you’ve also got the oil to keep those turbines lubricated and running (and to make those wind-catching blades).


Goal to train 100,000 teachers in STEM no longer lofty

There has been a concerted effort across the U.S. to train young students in STEM subjects (science, technology, engineering, and mathematics), which are crucial in preparing them for success and the jobs of the future.

But companies like Chevron, which provides millions of dollars annually into STEM education programs – from installing interactive STEM Zones at professional stadiums to driving a Mobile Fab Lab to elementary school campuses and community fairs — isn’t just focusing on kids, but also teachers.

As part of a broader STEM strategy, Chevron supports a program called 100Kin10, which aims to train 100,000 STEM teachers in 10 years – a goal set by President Obama that was once thought impossible. However, under Harvard law graduate Talia Milgrom-Elcott, the program has raised more than $100 million and trained 40,000 STEM teachers in the last five years, according to a report in

Milgrom-Elcott has achieved this by creating a deep network that connects education professionals and organizations that once operated as “islands unto themselves,” reported.

“Today, 100Kin10 has become a massive platform for collaboration that connects and empowers nearly 300 partner organizations,” according to the article. “What started out as a simple idea, is now becoming a full-fledged movement.”

To learn more about the program, visit 100Kin10.

Coffee: It’s All About Fuel

According to the National Coffee Association, more than 60 percent of Americans drink coffee every day.  Coffee is the fuel that gets us through the day; while the home-brewing gadgets, the cups that hold our morning cup of Joe, and the packaging distinguishing the ever so popular gourmet offerings are fueled by the fuel and petrochemical industries.

Syracuse University Professor Bob Thompson, who taught a course on Starbucks and the coffee phenomenon, phrased it best when he told USA Today, “You could say this nation runs on two dark liquids- petroleum and coffee, thousands of people are lubricated and made mobile by coffee every single day.”

Here’s a little science to go with that morning cup.  At the 2017 European Cardiac Society Congress, a long-term observational study of 20,000 participants showed significant correlation between drinking coffee and a reduction in mortality. Specifically, for older participants two cups a day was shown to have a 30 percent reduction in mortality.

Coffee is also routinely associated with lowering the risk for Alzheimer’s, diabetes, heart disease, stroke, cancer, liver disease, digestive disease, and Parkinson’s.

NASA gets a green thumb (with a little help from chemistry)

A gardening astronaut. Yes it’s true- growing produce in space is possible because of a polymer coating, fertilizer, and a successful partnership between chemical innovator BASF, fertilizer manufacturer Florikan, and NASA.

With astronauts in space for long periods of time, often 12 months or more, growing produce in space is better and tastes better than powdered and packaged foods.

The fertilizer which makes that magic happen is called FlorikanCRF and is coated with polymers made by BASF – chemical timers that control when and how much of each ingredient is released over a period of time.

The advancement of this technology has grown produce in space, but it also is beneficial for the agriculture industry here on earth. A defining characteristic of FlorikanCRF, proving valuable in space and on earth, is the ability to control the release of nutrients for 180 days or longer, and to ensure that nutrients go straight to the plant.

A successful investment in space technology, growing produce in a space station without light and soil is another step towards sustaining life in space and possibly even on other planets. And, with a growing demand for food, limited fertile land, and an environmentally conscious society, FlorikanCRF is making life better right here at home too.

Jimmy Iovine says not leaving Apple: Variety

FILE PHOTO: Music producer Jimmy Iovine poses at LACMA’s 50th anniversary gala in Los Angeles, California, April 18, 2015. REUTERS/Danny Moloshok

(Reuters) – Music mogul Jimmy Iovine is committed to staying at Apple Inc’s music streaming service, according to a report by Variety on Tuesday.

“I am committed to doing whatever Eddy [Cue], Tim [Cook] and Apple need me to do, to help wherever and however I can, to take this all the way,” Iovine told the publication in an interview.

Last week, Billboard magazine reported that Iovine would leave Apple Music in August. The report also stated that his departure is likely timed to his Apple shares fully vesting.

“All this stuff you’re seeing in the newspapers, let me tell you, my stock vested a long time ago,” Iovine told Variety.

Iovine, best known as the co-founder of Interscope Records, joined Apple in 2014 after the company bought Beats Electronics, a company that he co-founded with hip-hop artist and producer Dr Dre for $3 billion.

Apple did not immediately respond to a request for comment.

(Reporting by Aishwarya Venugopal in Bengaluru; Editing by Bernard Orr)

Trump says he would beat Oprah Winfrey in White House race

U.S. President Donald Trump, flanked by U.S. Senator Dick Durbin (D-IL), holds a bipartisan meeting with legislators on immigration reform at the White House in Washington, U.S. January 9, 2018. REUTERS/Jonathan Ernst

WASHINGTON (Reuters) – U.S. President Donald Trump said on Tuesday he could beat Oprah Winfrey in a presidential race, while one of Winfrey’s closest friends said the media mogul and actress was “intrigued” by the possibility of running but was not considering it now.

Speculation about a 2020 White House bid by Winfrey blew up on social media and news outlets after her rousing “new day” speech at the Golden Globes awards show on Sunday night, which touched on female and black empowerment, her roots in poverty and support of those who speak up about sexual abuse and harassment.

But some media commentators also injected skepticism into the surge of excitement among fans of the former talk show star, saying the Democratic Party and the country might well reject the notion of another celebrity political novice following Trump’s 2016 election.

Winfrey, long associated with Democratic politics and fundraising, has not commented publicly on the speculation. Known to millions by her first name, Winfrey, 63, has been a cultural force in the country for decades.

Trump, speaking with reporters during a White House meeting with lawmakers, said in response to a question, “Yeah I’ll beat Oprah. Oprah would be a lot of fun.

“I know her very well. … I like Oprah. I don’t think she’s going to run,” said the Republican president, 71.

Winfrey confidante Gayle King said earlier on Tuesday there was no change in Winfrey’s past position – that she is not interested in running for president.

“I do think she’s intrigued by the idea, I do think that,” King said on the “CBS This Morning” program. “I also know that after years of watching ‘The Oprah (Winfrey) Show’ you always have the right to change your mind. I don’t think at this point she’s actually considering it.”

However, CNN, citing two of Winfrey’s close friends, reported on Monday that the television and movie producer and actress was actively thinking about a White House bid.

Winfrey has raised millions of dollars for various causes, including shelters for battered women but, like Trump when he launched his White House campaign, she has no prior experience in government. Trump, a businessman and former reality TV star, based part of his appeal on the fact he was truly not a Washington insider.

“NOPRAH! Do we really need another celebrity president?” read the front page of Tuesday’s New York Post. A critique in Slate on Monday was headlined “Oprah? Really?,” and bemoaned the “impossibly boring” current crop of major political figures, making people more likely to vote for celebrities like Trump or Winfrey.

Former Trump White House Press Secretary Sean Spicer, who was the public face of some of the Trump administration’s early missteps last year, said on the “Good Morning Britain” show that Winfrey lacked “political infrastructure” and would have a hard time adjusting to the White House.

Winfrey first gained national fame with her TV talk show, which often focused on self-improvement and touched on previously taboo subjects like incest, rape, eating disorders and depression. She used the show’s success to build a media empire encompassing movie production, magazines, cable TV, and satellite radio, becoming one of the world’s richest women.

Winfrey also branched out into acting. She is credited with roles in nearly 30 movie and TV productions, including a role in director Steven Spielberg’s “The Color Purple” that earned her an Oscar nomination for best supporting actress.

(Reporting by Ian Simpson and Jeff Mason; Additional reporting by Jonathan Oatis and Jill Serjeant; Editing by Frances Kerry)

Actor Franco says sex accusations ‘not accurate’ but will fix any wrongs

FILE PHOTO: Director and star James Franco arrives for the gala presentation of “The Disaster Artist” at the AFI Film Festival in Los Angeles, California, U.S., November 12, 2017. REUTERS/Mike Blake/File Photo

LOS ANGELES (Reuters) – Golden Globe winner James Franco said accusations of sexual misconduct made against him on Twitter this week were “not accurate” but said in a television interview that “if I’ve done something wrong, I will fix it.”

Franco, 39, was asked to comment on the accusations in an appearance on Stephen Colbert’s “The Late Show” on Tuesday. They surfaced on Twitter minutes after he accepted a best comedy actor Golden Globe on Sunday for his role in “The Disaster Artist.”

Franco also is nominated for a Screen Actors Guild award for the role at a Jan. 21 ceremony in Los Angeles.

Three women made comments on Twitter alleging sexual misbehavior by Franco, who on Sunday was wearing a Time’s Up movement pin supporting victims of sexual harassment in the wider workplace. Some of the tweets were later deleted.

A New York Times event this week where Franco was due to talk about “The Disaster Artist,” which he also directed and produced, and was subsequently canceled.

“The things I heard that were on Twitter are not accurate but I completely support people coming out and being able to have a voice because they didn’t have a voice for so long,” Franco told Colbert. “So, I don’t want to shut them down in any way.

“The way I live my life, I can’t live if there’s restitution to be made, I will make it. So, if I’ve done something wrong, I will fix it. I have to,” he said without elaborating.

Franco’s representatives did not respond to requests for further comment on Wednesday.

Sunday’s Golden Globe ceremony was marked by jokes and powerful speeches about the sexual misconduct scandal that has roiled Hollywood and led to dozens of men being fired, forced to stand down or dropped from creative projects.

(Reporting by Jill Serjeant; Editing by Bill Trott)

‘Black Panther’ Becomes Fandango’s Top Early Pre-Seller Among Marvel Movies


By Dave McNary

LOS ANGELES ( – Advance sales for Disney-Marvel’s “Black Panther” have set a new record for Fandango as the top seller among Marvel Cinematic Universe movies in the first 24 hours, topping “Captain America: Civil War.”

Sales launched Monday night after a national spot aired during the telecast of the College Football Playoff National Championship. Chadwick Boseman stars as T’Challa, who takes over as the king of Wakanda after his father T’Chaka is killed, as shown in “Captain America: Civil War.” The film also stars Angela Bassett’s Ramonda, Forest Whitaker’s Zuri, and Michael B. Jordan’s Erik Killmonger.

The film opens on Feb. 16.

“‘’ is riding an incredible wave of momentum right now,” said editor Erik Davis. “It’s one of the biggest and most anticipated movies to ever open in the month of February, and its trailers have electrified the internet. Tickets have been going fast ever since pre-sales started on Fandango late Monday.”

Fandango said a survey of more than 8,000 moviegoers showed that “Black Panther” was voted as one of the year’s top two most anticipated movies, ranking second to Disney-Marvel’s “Avengers: Infinity War,” which includes many of the “Black Panther” characters, and Boseman was voted as the most anticipated comic book hero in a standalone movie.

“Captain America: Civil War” opened in May of 2016, and is the 15th-highest worldwide grosser, with $1.15 billion.

Trump calls U.S. court system ‘unfair’ after DACA ruling

FILE PHOTO: U.S. President Donald Trump speaks during a meeting with Republican members of the Senate about immigration at the White House in Washington, U.S., January 4, 2018. REUTERS/Kevin Lamarque

WASHINGTON (Reuters) – U.S. President Donald Trump on Wednesday blasted the U.S. court system as “broken and unfair” after a federal judge blocked his move to end the program protecting young immigrants brought to the United States illegally by their parents, commonly known as “Dreamers.”

The Trump administration in September announced it would rescind the Deferred Action for Childhood Arrivals (DACA) program, drawing challenges in multiple federal courts from Democratic state attorneys general, organizations and individuals.

Late on Tuesday, U.S. District Judge William Alsup in San Francisco ruled that DACA must remain in place while the litigation is resolved.

In a post on Twitter on Wednesday morning, Trump wrote, “It just shows everyone how broken and unfair our Court System is when the opposing side in a case (such as DACA) always runs to the 9th Circuit and almost always wins before being reversed by higher courts.”

It was not immediately clear which court Trump was referring to in his post. Alsup’s court is the District Court for the Northern District of California. Appeals of decisions by that court are commonly handled by the 9th U.S. Circuit Court of Appeals, which also reviews appeals of rulings by district courts in the U.S. West, Hawaii and Guam.

Earlier on Wednesday the White House branded the federal judge’s ruling as “outrageous.”

“An issue of this magnitude must go through the normal legislative process,” White House spokeswoman Sarah Sanders said in a statement. “President Trump is committed to the rule of law, and will work with members of both parties to reach a permanent solution that corrects the unconstitutional actions taken by the last administration.”

Alsup ruled that the federal government did not have to process new applications from people who had never before received protection under the program. However, he ordered the government to continue processing renewal applications from people who had previously been covered.

The ruling could complicate negotiations between Trump and congressional leaders over immigration reform. Sanders called the decision “outrageous, especially in light of the President’s successful bipartisan meeting with House and Senate members at the White House” on immigration reform on Tuesday.

(Reporting by Blake Brittain; Editing by Mohammad Zargham and Jonathan Oatis)

South Korea’s Moon says Trump deserves ‘big’ credit for North Korea talks

South Korean President Moon Jae-in delivers a speech during his New Year news conference at the Presidential Blue House in Seoul, South Korea, January 10, 2018. REUTERS/Kim Hong-Ji

By Christine Kim and Soyoung Kim

SEOUL (Reuters) – South Korean President Moon Jae-in credited U.S. President Donald Trump on Wednesday for helping to spark the first inter-Korean talks in more than two years, and warned that Pyongyang would face stronger sanctions if provocations continued.

The talks were held on Tuesday on the South Korean side of the demilitarized zone, which has divided the two Koreas since 1953, after a prolonged period of tension on the Korean peninsula over the North’s missile and nuclear programs.

North Korea ramped up its missile launches last year and also conducted its sixth and most powerful nuclear test, resulting in some of the strongest international sanctions yet.

The latest sanctions sought to drastically cut the North’s access to refined petroleum imports and earnings from workers abroad. Pyongyang called the steps an “act of war”.

Seoul and Pyongyang agreed at Tuesday’s talks, the first since December 2015, to resolve all problems between them through dialogue and also to revive military consultations so that accidental conflict could be averted.

“I think President Trump deserves big credit for bringing about the inter-Korean talks, I want to show my gratitude,” Moon told reporters at his New Year’s news conference. “It could be a resulting work of the U.S.-led sanctions and pressure.”

Trump and North Korean leader Kim Jong Un exchanged threats and insults over the past year, raising fears of a new war on the peninsula. South Korea and the United States are technically still at war with the North after the 1950-53 Korean conflict ended with a truce, not a peace treaty.


Washington had raised concerns that the overtures by North Korea could drive a wedge between it and Seoul, but Moon said his government did not differ with the United States over how to respond to the threats posed by Pyongyang.

“This initial round of talks is for the improvement of relations between North and South Korea. Our task going forward is to draw North Korea to talks aimed at the denuclearization of the North,” Moon said. “(It’s) our basic stance that will never be given up.”

Moon said he was open to meeting North Korea’s leader at any time to improve bilateral ties, and if the conditions were right and “certain achievements are guaranteed”.

“The purpose of it shouldn’t be talks for the sake of talks,” he said.

However, Pyongyang said it would not discuss its nuclear weapons with Seoul because they were only aimed at the United States, not its “brethren” in South Korea, nor Russia or China, showing that a diplomatic breakthrough remained far off.

North Korea’s Rodong Sinmun newspaper said all problems would be resolved through efforts by the Korean people alone.

“If the North and South abandon external forces and cooperate together, we will be able to fully solve all problems to match our people’s needs and our joint prosperity,” it said.

Washington still welcomed Tuesday’s talks as a first step toward solving the North Korean nuclear crisis. The U.S. State Department said it would be interested in joining future talks, with the aim of denuclearizing the North.

The United States, which still has 28,500 troops stationed in South Korea, initially responded coolly to the idea of inter-Korean meetings. Trump later called them “a good thing” and said he would be willing to speak to Kim.

Lee Woo-young, a professor at the University of North Korean Studies in Seoul, said it was wise of Moon to praise Trump, his sanctions and pressure campaign.

“By doing that, he can help the U.S. build logic for moving toward negotiations and turning around the state of affairs in the future, so when they were ready to talk to the North, they can say the North came out of isolation because the sanctions were effective.”

The United States and Canada are set to host a conference of about 20 foreign ministers on Jan. 16 in Vancouver to discuss North Korea, without the participation of China, Pyongyang’s sole major ally and biggest trade partner.

China would not attend the meeting and is resolutely opposed to it, said foreign ministry spokesman Lu Kang.

“It will only create divisions within the international community and harm joint efforts to appropriately resolve the Korean peninsula nuclear issue,” he told a regular briefing on Wednesday.


Pyongyang also said it would send a large delegation to next month’s Winter Olympics in South Korea.

Washington agreed with Seoul last week to postpone until after the Olympics joint military exercises that Pyongyang denounces as rehearsals for invasion. But it also said the apparent North-South thaw had not altered the U.S. intelligence assessment of the North’s weapons programs.

The United States has also warned that all options, including military, are on the table in dealing with the North.

“We cannot say talks are the sole answer,” Moon said. “If North Korea engages in provocations again or does not show sincerity in resolving this issue, the international community will continue applying strong pressure and sanctions.”

Seoul said on Tuesday it was prepared to offer financial assistance and lift some unilateral sanctions temporarily so North Koreans could attend the Olympics. North Korea said its delegation would include athletes and officials, among others.

However, Moon said on Wednesday South Korea had no plans for now to ease unilateral sanctions against North Korea, or revive economic exchanges that could run foul of United Nations sanctions.

Moon also said his government would continue working toward recovering the honor and dignity of former “comfort women”, a euphemism for those forced to work in Japan’s wartime brothels.

But historical issues should be separated from bilateral efforts with Japan to safeguard peace on the Korean peninsula, he added.

“It’s very important we keep a good relationship with Japan,” Moon said.

On Tuesday, South Korea said it would not seek to renegotiate a 2015 deal with Japan despite determining that the pact was insufficient to resolve the divisive issue, and urged Japan for more action to help the women.


(Additional reporting by Josh Smith and Hyonhee Shin in SEOUL and Michael Martina in BEIJING, Writing by Soyoung Kim, Editing by Paul Tait)