New whooping cough strain in US raises questions

NEW YORK (AP) — Researchers have discovered the first U.S. cases of whooping cough caused by a germ that may be resistant to the vaccine.

Health officials are looking into whether cases like the dozen found in Philadelphia might be one reason the nation just had its worst year for whooping cough in six decades. The new bug was previously reported in Japan, France and Finland.

"It's quite intriguing. It's the first time we've seen this here," said Dr. Tom Clark of the Centers for Disease Control and Prevention.

The U.S. cases are detailed in a brief report from the CDC and other researchers in Thursday's New England Journal of Medicine.

Whooping cough is a highly contagious disease that can strike people of any age but is most dangerous to children. It was once common, but cases in the U.S. dropped after a vaccine was introduced in the 1940s.

An increase in illnesses in recent years has been partially blamed on a version of the vaccine used since the 1990s, which doesn't last as long. Last year, the CDC received reports of 41,880 cases, according to a preliminary count. That included 18 deaths.

The new study suggests that the new whooping cough strain may be why more people have been getting sick. Experts don't think it's more deadly, but the shots may not work as well against it.

In a small, soon-to-be published study, French researchers found the vaccine seemed to lower the risk of severe disease from the new strain in infants. But it didn't prevent illness completely, said Nicole Guiso of the Pasteur Institute, one of the researchers.

The new germ was first identified in France, where more extensive testing is routinely done for whooping cough. The strain now accounts for 14 percent of cases there, Guiso said.

In the United States, doctors usually rely on a rapid test to help make a diagnosis. The extra lab work isn't done often enough to give health officials a good idea how common the new type is here, experts said.

"We definitely need some more information about this before we can draw any conclusions," the CDC's Clark said.

The U.S. cases were found in the past two years in patients at St. Christopher's Hospital for Children in Philadelphia. One of the study's researchers works for a subsidiary of Johnson & Johnson, which makes a version of the old whooping cough vaccine that is sold in other countries.

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JournaL: http://www.nejm.org

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Chris Brown returns to court for probation issues

LOS ANGELES (AP) — With the woman he assaulted throwing him a kiss, Chris Brown walked into court Wednesday to face allegations he failed to complete his community labor sentence for Rihanna's 2009 beating.

A judge asked for more information and scheduled another hearing in two months.

Rihanna, the glamorous singer whose bruised face became a tabloid fixture after she was beaten by her then-boyfriend on the way to the Grammys, has been dating Brown again.

She arrived with the R&B star, his mother and two other women and blew him a kiss as he entered the courtroom. They left together after the short proceeding in which Superior Court Judge James Brandlin set the next hearing for April 5.

Brown's lawyer, Mark Geragos, said he was disturbed about the way the district attorney handled the matter and said he would be filing a motion opposing the prosecution's move to modify Brown's fulfillment of his community labor sentence.

Prosecutors, who said they could find no credible evidence that Brown had completed his community labor in his home state of Virginia, asked that he start all over and put in 180 days in Los Angeles County.

Prosecutors have suggested there was either sloppy record keeping or fraudulent reporting.

The judge noted during the brief court session that a prosecution filing did not request revocation of Brown's probation and he, therefore, would not revoke it.

A motion filed Tuesday also raised for the first time in Brown's felony assault case several incidents that prosecutors said demonstrate Brown has ongoing anger management issues.

The motion cited a Jan. 27 fight between Brown and fellow R&B star Frank Ocean, and a 2011 outburst in which Brown threw a chair through a window after he was asked about the Rihanna attack on "Good Morning America."

The filing represents a dramatic shift in the case against Brown, who was repeatedly praised by the judge overseeing his case for his completion of domestic violence courses and his community service work in his home state of Virginia.

That changed in September, when prosecutors raised concerns about Brown's community service after he logged 701 hours in seven months — an amount that had previously taken him more than two years to achieve.

Los Angeles investigators traveled to Richmond, Va., to investigate Brown's service, which was only described in broad strokes by Richmond Police Chief Bryan Norwood, who was overseeing the singer's community labor.

"This inquiry provided no credible, competent or verifiable evidence that defendant Brown performed his community labor as presented to this court," Deputy District Attorney Mary Murray wrote.

Brown's attorney Geragos blasted the court filing, saying the prosecutor ignored interviews "where sworn peace officers stated unequivocally that Mr. Brown was supervised and did all of the community service."

"I plan on asking for sanctions from the DA's office for filing a frivolous, scurrilous and frankly defamatory motion," he said Tuesday.

Brown's case was transferred to Brandlin after a recent shuffling of judicial assignments.

After pleading guilty to the Rihanna attack, Brown was given permission to serve 180 days of community labor in his home state of Virginia, but only as long as he performed manual labor such as graffiti removal and roadside cleanup.

Given problems with documentation and statements from some witnesses who contradict Brown's claims of work, prosecutors asked Brandlin to order Brown to repeat his service in Los Angeles.

Brown spent one-third of the hours he logged in Virginia working night shifts at a day care center in rural Virginia where his mother once served as director and where the singer spent time as a child.

A detective who checked on Brown's work nine times at the Tappahannock Children's Center found the singer, his mother and a bodyguard at the center on each visit.

The records said Brown waxed floors or performed general cleaning at the center.

A professional floor cleaner contracted to work at the daycare center told investigators he had been cleaning the floors during the months Brown reported working at the facility.

"Claims that the defendant cleaned, stripped and waxed floors at that location have been credibly contradicted," prosecutors said in the filing.

Brown's mother, Joyce Hawkins, no longer had a formal role at the day care center but had her own set of keys and coordinated her son's work at the facility, prosecutors said.

Murray stated in her filing that Norwood's report on Brown's service was "at best sloppy documentation and at worst fraudulent reporting."

Richmond police spokesman Gene Lepley declined to discuss the allegations.

"We believe it would inappropriate to comment on a matter that's before the court," Lepley said.

According to the motion, officials with Virginia's probation office told investigators that Brown's arrangement to be supervised by Norwood was "extremely unusual" and had not been approved by the agency. No one from Virginia's probation department oversaw Brown's hours, prosecutors said.

The motion noted that the only records the department has to indicate Brown was supervised were officers' overtime sheets. Five of 21 days that officers logged overtime for Brown were spent providing security for the singer's concerts.

The allegations are the latest pre-Grammy controversy for Brown, who was arrested shortly after the 2009 ceremony for his attack on Rihanna. He has since returned to the awards show by performing and winning an award in 2011 for his album "F.A.M.E."

Brown and Ocean are competing against one other for the Best Urban Contemporary Album category at Sunday's Grammys.

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AP writers Anthony McCartney and Ryan Pearson contributed to this report.

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Chicago sees surge in foreclosure auctions

More than 35,000 homes and small multifamily buildings in the Chicago area completed the foreclosure process last year, the highest number since the housing crisis began, and the vast majority of them became bank-owned.

An increase in foreclosure auctions was expected since lenders shelved many foreclosure cases while state and federal authorities investigated allegations of faulty foreclosure processes. Still, the heightened level of auctions — 35,244 in 2012, compared with 20,281 in 2011 — along with an increase in initial foreclosure filings, shows the local housing market has a long road to recovery, according to the Woodstock Institute.

"There's going to be pain in the housing market in the short term," said Katie Buitrago, senior policy and communications associate at Woodstock. "There's still high levels of filings. Five years into it, there is still work to be done to help people save their homes."

The Chicago-based public policy and research group is expected to release its report on 2012 foreclosure activity Wednesday.

The year-end numbers show that, with few exceptions, all Chicago neighborhoods and suburban communities saw high double-digit percentage gains in auctions last year. Across the six-county area, 91.3 percent of the foreclosed properties were repossessed by lenders. At the same time, notices of initial default sent to homeowners, the first step in the foreclosure process, increased by 2.9 percent last year, to 66,783.

Real estate agents have worried for more than two years about a glut of foreclosed properties — a shadow inventory — that banks would list for sale en masse and cause home values to plunge. That largely has not happened, but the vast number of distressed properties in the market has kept a lid on local home values.

On Tuesday, for instance, Fannie Mae and Freddie Mac's websites listed 2,415 Cook County homes for sale that the two agencies had repossessed.

Chicago-area home prices, including distressed sales, fell 2.3 percent in December from a year ago, housing analytics firm CoreLogic said Tuesday. Illinois was one of only four states to see home-price depreciation.

The increase in auctions "is a mixed blessing," Buitrago said. "We've been having a lot of trouble in the region with vacant properties that have been languishing for years. The longer they're vacant, the more likely they are to be a destabilizing force in their communities."

Woodstock found that within the city of Chicago, there were 20 communities where more than 1 in 10 owner-occupied one- to four-unit residential buildings and condos went through foreclosure from 2008 to 2012. Five of those neighborhoods are included in the city's 18-month-old Micro-Market Recovery Program, a coordinated effort to stabilize neighborhoods and property values hit hard by foreclosures and vacant buildings.

Also designed to benefit hard-hit areas are the recent establishment of a Cook County Land Bank and legislation waiting for Gov. Pat Quinn's signature that will fast-track the foreclosure process for vacant, abandoned homes while providing financial resources to foreclosure prevention efforts.

mepodmolik@tribune.com

Twitter @mepodmolik

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Fast-moving snow band hitting area, may slow evening commute

CAPTIONS

Rock salt
Rock salt does its job at Sheridan Road Granville Avenue as snow falls in the Edgewater neighborhood on Chicago's North Side. (Phil Velasquez, Chicago Tribune /February 4, 2013)

Staff report

5:06 p.m. CST, February 5, 2013

A fast-moving storm dumped as much as 1-1/2 inches of snow on parts of the Chicago area this afternoon, but had largely moved on before 5 p.m., according to the National Weather Service.

The weather service had predicted snowfalls of an inch or two, falling as quickly as an inch or more an hour. In McHenry County, a weather spotter reported 1-1/2 inches falling between noon and 2:45 p.m., according to the weather service. But many parts of the Chicago area reported less than half an incho of snow.

This morning, State Police responded to a high number of spinouts, including several in the inbound express lanes of the Dan Ryan Expressway 43rd Street around 5:30 a.m.  Officials closed the express lanes so a transportation crew could spread salt.

This afternoon's snow led to some accidents, but no great rash of them.

Temperatures today are expected to hover in the 30s. Snow or rain is expected to return Thursday morning.

chicagobreaking@tribune.com

Twitter: @ChicagoBreaking

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Dell to go private in landmark $24.4 billion deal

SAN FRANCISCO/NEW YORK (Reuters) - Michael Dell will take Dell Inc private for $24.4 billion in the biggest leveraged buyout since the financial crisis, a deal that allows the billionaire chief executive to attempt a revival of his struggling computer company without Wall Street scrutiny.

The deal, which requires shareholder approval, would end a 24-year run on public markets for a company that was conceived in a college dorm room and quickly rose to the top of the global personal computer business - only to be rendered an also-ran over the past decade as PC prices crumbled and customers moved to tablets and smartphones.

Dell executives said on Tuesday that the company will stick to a strategy of expanding its software and services offerings for large companies, with the goal of becoming a full-service provider of corporate computing services in the mold of the highly profitable IBM. They downplayed speculation that Dell might spin off the low-margin PC business on which it made its name.

Dell did not give specifics on what it would do differently as a private entity to convince skeptics who say it missed the big industry shift to tablet computers, smartphones and high-powered consumer electronic devices such as music players and gaming consoles. Sources with knowledge of the matter said Dell's board had considered everything from a recapitalization to a breakup of the company before going the leveraged buyout route, but did not elaborate.

"A private Dell is likely to more aggressively cut costs, in our view. But we think merely restructuring only postpones the inevitable, creating a value trap," said Discern Inc analyst Cindy Shaw. "Dell needs to do more than reduce its cost structure. It needs to innovate."

The deal will be financed with cash and equity from Michael Dell, cash from private equity firm Silver Lake, a $2 billion loan from Microsoft Corp, and debt financing from a consortium of banks. The price of $13.65 per share represents a 25 percent premium over Dell's stock price before news of a pending deal leaked in January.

The company will now conduct a 45-day "go-shop" process in which others might make higher offers.

"Though we were hoping for a higher price, we trust that the Dell board has properly done its job by conducting a process open to any third party offers and reviewing all strategic options," said Bill Nygren, who manages the $7.3 billion Oakmark Fund and $3.2 billion Oakmark Select Fund, which have a $250 million position in Dell. "Should we hear evidence to the contrary, we'll raise a ruckus."

Some of Dell's rivals took pot shots at the deal, in unusually pointed comments that reflect how bitter the struggle is in a commoditized PC industry that has wrestled to reverse a decline in sales globally.

Hewlett-Packard Co, which itself has suffered years of turmoil in the face of challenges in the PC business, said in a statement that Dell's deal would "leave existing customers and innovation at the curb," and vowed to exploit the opportunity.

Lenovo, which consists largely of the former IBM PC unit, referred to the "distracting financial maneuvers and major strategic shifts," of its rival while emphasizing its own stability and strong financial position.

Dell was regarded as a model of innovation as recently as the early 2000s, pioneering online ordering of custom-configured PCs and working closely with Asian component suppliers and manufacturers to assure rock-bottom production costs. But as of 2012's fourth quarter, Dell's share of the global PC market had slipped to just above 10 percent from 12.5 percent a year earlier as its shipments dived 20 percent, according to research house IDC.

Michael Dell returned to the company as CEO in 2007 after a brief hiatus, but has been unable to engineer a turnaround thus far. Dell's focus on corporate computing in recent years has yet to yield results - and critics note competing successfully against incumbents, including IBM and HP, will not be easy no matter what the corporate structure.

Sales of PCs still make up the majority of Dell's revenues. Analysts say continued restructuring to focus on the corporate market may entail job cuts and more costly acquisitions. The company has acquired several large software and services companies in recent years as it seeks to reconfigure itself as a broad-based supplier of technology for big companies.

"We recognize this process will take more time," Chief Financial Officer Brian Gladden told Reuters. "We will have to make investments, and we will have to be patient to implement the strategy. And under a new private company structure, we will have time and flexibility to really pursue and realize the end-to-end solutions strategy."

Gladden said the company's strategy would "generally remain the same" after the deal closed, but "we won't have the scrutiny and limitations associated with operating as a public company."

Michael Dell, who has quietly built a highly successful investment firm even as the fortunes of his namesake company have waned, will contribute his 16 percent share of Dell's equity to the deal, along with cash from his MSD Capital. Bank of America Merrill Lynch, Barclays, Credit Suisse and RBC Capital Markets will offer debt financing.

Shares of Dell were up 1.2 percent at $13.43 in morning trading.

RECORD BUYOUT

Analysts said Dell could be more nimble as a private company, but it will still have to deal with the same difficult market conditions. IBM's famously successful transition from hardware vendor to corporate IT partner took place while it was trading on public markets.

There is little history to suggest whether going private makes such a transition easier. Freescale, formerly the semiconductor division of Motorola, was taken private in 2006 for $17.6 billion by a group of private equity firms including Blackstone Group LP, Carlyle Group and TPG Capital LP. Analysts say the resulting debt load hurt its ability to compete in the capital-intensive chip business. Freescale cut just under 5 percent of its work force last year as it continued to restructure.

The Dell deal would be the biggest private equity-backed, leveraged buyout since Blackstone Group LP's takeout of the Hilton Hotels Group in July 2007 for more than $20 billion, and is the 11th-largest on record.

The parties expect the transaction to close before the end of Dell's 2014 second quarter, which ends in July. News of the talks first emerged on January 14, although they reportedly started in the latter part of 2012. Michael Dell had previously acknowledged thinking about going private as far back as 2010.

Microsoft's involvement in the deal piqued much speculation about a renewed strategic partnership, but the software company is providing only debt financing and Dell said there were no specific business terms attached to the transaction. Dell has long been loyal to Microsoft's Windows operating system, which has been at the heart of its PC business since its inception.

Microsoft's loan will take the form of a 10-year subordinated note that will be the "closest thing to equity," with roughly 7 percent to 8 percent interest, a source close to the matter told Reuters.

Banking sources said the debt financing package for the deal will total between $11 billion and $12 billion to back the leveraged buyout. The final size of the financing depends on what portion of the company's existing notes remain outstanding, sources added. The banks are expected to begin reaching out to other lenders to begin syndicating the loans as early as Tuesday.

J.P. Morgan and Evercore Partners were financial advisers, and Debevoise & Plimpton LLP was the legal adviser to the special committee of Dell's board. Goldman Sachs was financial adviser, and Hogan Lovells was legal adviser to Dell.

Wachtell, Lipton, Rosen & Katz was legal adviser to Michael Dell. BofA Merrill Lynch, Barclays, Credit Suisse and RBC Capital Markets were financial advisers to Silver Lake, and Simpson Thacher & Bartlett LLP was its legal adviser.

(Additional reporting by Greg Roumeliotis; Writing by Ben Berkowitz and Edwin Chan; Editing by Tiffany Wu and Leslie Gevirtz)

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Her knee shredded, Lindsey Vonn done for season

SCHLADMING, Austria (AP) — All it took was a moment. Lindsey Vonn landed hard and tumbled face first with a piercing shriek.

Just like that, the star American skier was on the ground with two torn ligaments in her right knee and a broken bone in her lower leg.

The cascading fall down the slope during the super-G at the world championships Tuesday knocked out the four-time World Cup champion for the rest of the season, the latest and most serious in a string of injuries for Vonn at skiing's biggest events.

The U.S. team said in a statement it expects her back for the next World Cup season and the 2014 Sochi Olympics, which start a year from this week.

The harrowing accident came after Vonn was lifted into the air off a jump in the opening race at the championships. As she hit the ground, her right leg gave way and she spun down face first, throwing an arm out to protect herself. She ended up on her back as she smashed through a gate.

On the television feed, Vonn was clearly heard screaming an expletive as she landed, then a despairing "Yes, yes," when someone asked, "Are you hurt?"

Race leader and eventual champion Tina Maze watched with her mouth agape. The concern also was obvious on the face of Vonn's sister, Laura Kildow, who has been traveling with her full time this season.

For 12 minutes, Vonn lay on the snow getting medical treatment before being airlifted by helicopter to a hospital in Schladming.

Vonn tore her anterior cruciate ligament and medial collateral ligament in her right knee, U.S. ski team medical director Kyle Wilkens said in a statement. The broken bone was described as a "lateral tibial plateau fracture."

Christian Kaulfersch, the assistant medical director at the worlds, said Vonn left the Schladming hospital on Tuesday afternoon and will have surgery in another hospital. "She first wanted to go back to the team hotel to mentally deal with all what has happened," Kaulfersch said.

Vonn's father, Alan Kildow, spoke with her by phone and said that she's, "mad at the way things turned out." His daughter told him that she landed in a clump of sugar snow, or ice crystals, that caused her to fall forward, he said.

"She's a tough character. A very determined and tough character," Kildow told The Associated Press in a phone interview. "She will be back."

Kildow said that surgery could take place as soon as this weekend, likely at the Steadman Clinic, in Vail, Colo. Recovery time varies, according to Dr. Tom Hackett, an orthopedic surgeon at the clinic and the team physician for the U.S. snowboard squad.

But Vonn could be looking at six-to-eight months before she's back on skis.

"It's not like at six months you say, 'OK, you can get back on a super-G course," Hackett said. "There's a progression to getting back on skis, getting back to taking some easy runs, getting back to some gates, and working your way back to some steeper terrain. There's a whole return to snow progression that we've developed over many years."

Time enough to get back for Sochi?

"I think so," Hackett said. "I would be very optimistic she could come back strong. She's a fierce competitor. She's a fighter and chances are that she will — I would think — essentially take all of that athletic energy and put it into her rehabilitation. There's a really good chance she could come back as strong as ever."

Comebacks are nothing new for Vonn, who has also been afflicted by injuries at her last six major championships — from a thumb she sliced on a champagne bottle at the 2009 worlds in Val d'Isere, France, to a bruised shin that she cured with Austrian cheese at the Vancouver Olympics.

This one, however, could prove the biggest test yet for the 28-year-old who won the downhill at the 2010 Vancouver Olympics.

Vonn took a month off this season after being hospitalized for an intestinal illness in November, and had just regained her form with two wins last month.

That was evident at the start of her Tuesday's run. She led Maze by 0.04 seconds at the first checkpoint and was just 0.12 back at the second interval and seemingly on her way to a medal, if not victory.

Exactly what went wrong was debated by competitors and officials at the championships.

The start of the race was delayed by 3½ hours because of fog hanging over the course and it began in waning light at 2:30 p.m local time. Even before Vonn's crash, a course worker fell and also had to be airlifted. He was reported to have broken his nose.

All the delays made for what skiers call flat light — overcast and dreary conditions — when Vonn raced.

"Lindsey did a great job on top and Lindsey has won a lot of races in flat light so the flat light was definitely not a problem," U.S. Alpine director Patrick Riml told the AP.

"We are upset obviously with what happened but if you don't know the facts and why they decided to start and what the weather forecast was it's hard to say without any reasoning," Riml said. "And they probably had a reason, otherwise they wouldn't have started."

Atle Skaardal, women's race director for the International Ski Federation, defended the decision to go ahead with the event.

"I can confirm that the visibility was great, there were no problems, and the course was also in good shape," he said. "I don't see that any outside factors played a role in this accident. ... The other factors were like they were supposed to be for ski racing."

Vonn's list of injuries at major championships is long.

Two years ago, she pulled out midway through the last worlds in Garmisch-Partenkirchen, Germany, because of a mild concussion. At the 2010 Vancouver Olympics, Vonn skied despite a severely bruised shin to win the downhill and take bronze in the super-G.

At the 2009 worlds in Val d'Isere, she sliced her thumb on a champagne bottle after sweeping gold in the downhill and super-G, forcing her out of the giant slalom. At the 2007 worlds in Are, Sweden, Vonn injured her knee in training and missed her final two events.

And at the 2006 Turin Olympics, she had a horrific crash in downhill training and went directly from her hospital room to the mountain to compete in four of her five events.

The conditions Tuesday varied from racer to racer, and as the light began to fade even more, organizers stopped the race after only 36 of the 59 skiers had come down.

Maze skied immediately before Vonn.

"I saw it was a very high jump, so I knew I had to take the right line to make the next gate," she said. "World championship races often have special conditions and the mistakes from the girls were not because of the slope."

The two racers who started immediately after Vonn, former overall winner Maria Hoefl-Riesch of Germany and local favorite Anna Fenninger of Austria, each skied off course. In all, six women who started the course failed to finish. Still, Skaardal said he never thought about stopping the race.

"It's not a very difficult course but in some parts you couldn't see anything," said Fabienne Suter of Switzerland, who finished fifth.

Vonn's teammate Julia Mancuso also thrived in the difficult conditions and won the bronze medal.

"It's the same for everybody," U.S. speed coach Chip White said. "Everyone had to wait for a long time and that's always difficult. And the holds were every 15 minutes so it really doesn't give you a chance to go and do something else. You're always kind of on edge at the ready. It's a difficult situation but everybody had the same difficult situation."

Not long after Vonn was injured, NBC hosted a news conference in New York to discuss its coverage of the Sochi Games. A poster of a smiling Vonn hung in the room next to one of snowboarder Shaun White, evidence of the network's unsurprising expectations that she would be one of the biggest stars in Sochi.

The network's executives chose to put a positive spin on the injury.

"We expect her to be the comeback Olympian of the year," NBC Sports Group Chairman Mark Lazarus said.

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Associated Press writer Eric Willemsen in Schladming and AP Sports Writers Pat Graham and Rachel Cohen contributed to this report.

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Disney working on standalone 'Star Wars' films

LOS ANGELES (AP) — Disney is mining The Force for even more new films.

Walt Disney Co. CEO Bob Iger says screenwriters Larry Kasdan and Simon Kinberg are working on standalone "Star Wars" movies that aren't part of the planned new trilogy.

Iger told CNBC on Tuesday that the standalone movies will be based on "great 'Star Wars' characters that are not part of the overall saga." The films would be released during the six-year period of the new trilogy, starting in 2015 with "Star Wars: Episode VII."

Disney confirmed last month that "Star Trek" director J.J. Abrams will direct the seventh installment of the "Star Wars" saga.

Disney bought "Star Wars" maker Lucasfilm last year for more than $4 billion.

The "Star Wars" prequel trilogy was released from 1999 to 2005.

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Deficit hits 5-year low, but cuts drag economy

WASHINGTON -- The federal deficit will drop to less than $1 trillion for the first time in five years, but massive spending cuts that have improved the budget outlook are also slowing the economy, according to a report released Tuesday by the Congressional Budget office.

The nonpartisan arbiter of federal budgets said the combination of new tax revenue from the "fiscal cliff" deal as well as looming cuts that kick in March 1 will push the deficit down to $845 billion for fiscal 2013. Deficits have topped $1 trillion in recent years.

The projections will fuel the coming budget debates, which started Tuesday as President Obama was calling on Congress to steer around the coming budget cuts.

The budget office said the cuts will contribute to an economy that lags in 2013. The unemployment rate likely will remain above 7.5% through the year. It predicted that the gross domestic product will be well below its potential, growing by just 1.4%, more than half a percentage point slower than would happen if the spending cuts were averted.

At the same time, the nation's debt load is expected to fluctuate but ultimately rise to record levels this decade, largely because of increased spending on healthcare and the federal safety net for older Americans with the aging of the baby boom population.

Additionally, the outlook shows how difficult it will be for House Republicans to accomplish their goal of balancing the budget in 10 years with potentially deep austerity measures.

Even though revenue is rising and spending is decreasing, the overall budget outlook remains stark. By the end of the decade, public debt is set to rise to 77% of GDP, a decade of highs on par with debt levels in World War II.

"The projected path of the federal budget remains a significant concern," the CBO wrote.

Follow Politics Now on Twitter and Facebook

Lisa.mascaro@latimes.com

Twitter: @LisaMascaroinDC

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Alabama hostage standoff ends with gunman dead, boy safe

MIDLAND CITY, Ala. -- A man who killed a school bus driver and then held a 5-year-old boy hostage in an underground bunker in rural Alabama for nearly a week was killed on Monday and the child was plucked to safety without injury, law enforcement officials said.

FBI agents entered the bunker to rescue the child after fearing that he was in “imminent danger,” said Steve Richardson, special agent in charge in Mobile.

Negotiations with the suspect, identified as 65-year-old Jimmy Lee Dykes, had deteriorated during the previous 24 hours, Richardson said during a televised news conference.

“Mr. Dykes was observed holding a gun,” the FBI agent said.

The rescue of the boy came on the seventh day of a standoff that drew national media coverage and gripped a rural corner of southeast Alabama with dread.

The drama began when Dykes, a retired trucker and veteran of the war in Vietnam, seized the kindergarten student last Tuesday after boarding a school bus and killing its driver with four shots from a 9 mm handgun, local sheriff's department officials said.

Dykes fled with the child, identified only as Ethan, to a homemade bunker on the man's property down a dirt road.

The child was being treated on Monday at a local hospital, but was physically unharmed, Richardson said. The boy is due to celebrate his birthday on Wednesday and, by all accounts, was taken by Dykes at random.

It was not immediately clear how Dykes died.

A local law enforcement source said a stun or flash grenade was detonated as part of the operation to free the boy, but further details were not immediately released.

The hostage-taking came amid heightened concerns about gun violence and school safety across the United States after the December shooting deaths of 20 children and six adults at a Connecticut elementary school.

Law enforcement officials had offered few insights about Dykes and their negotiations with him ahead of the rescue just after 3 p.m. local time.

Earlier on Monday, Dale County Sheriff Wally Olson said the gunman had a “very complex” story to tell.

“Based on our discussion with Mr. Dykes, he feels like he has a story that's important to him, although it's very complex. And we try to make a safe environment for all for that,” Olson said, without elaborating.

The sheriff's office previously had thanked Dykes for allowing them to deliver medication, coloring books and toys to the boy, who is said to suffer from Asperger's Syndrome and attention deficit-hyperactivity disorder.

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Dell closer to buyout as price talks narrow: source

NEW YORK (Reuters) - Dell Inc moved closer to a nearly $24 billion buyout deal, with price negotiations narrowing to $13.50 to $13.75 a share in what would be the biggest leveraged buyout since the financial crisis.

Talks between Dell, the world's No. 3 computer maker, and a consortium led by its founder and chief executive, Michael Dell, to take the company private were in the final stages on Monday, a person familiar with the matter said.

An outcome is expected soon, the person said, cautioning that no final agreement had been reached and negotiations could still break down.

Dell shares fell 2.6 percent to $13.27 in afternoon trading.

Microsoft Corp, which provides its Windows software for Dell computers and is also part of the investment consortium, is expected to invest around $2 billion in the deal, while private equity firm Silver Lake is expected to put in about $1 billion, the source said.

Michael Dell is expected to roll over his roughly 16 percent stake and put in some of his own money so he has control of the company, the source added.

Dell and Silver Lake declined to comment and Microsoft did not immediately respond to a request for a comment.

The $13.50 to $13.75 per share price range being negotiated translates into an equity valuation for Dell of between $23.5 billion to $23.9 billion.

The $13.75 per share is a premium of about 23 percent to the average of $11 per share Dell traded before news of the deal talks broke and is far below the $17.61 that the shares were trading a year ago."

Dell has steadily ceded market share in PCs to nimbler rivals such as Lenovo Group and is struggling to re-ignite growth. That's in spite of Michael Dell's efforts in the five years since he retook the helm of the company he founded in 1984, following a brief hiatus during which its fortunes waned rapidly.

Any deal that Michael Dell negotiates would need the approval of a majority of the shareholders. Deals that involve the considerable stake of a founder who is also the chief executive of the company are also likely to come in for extra scrutiny over whether the board exercised its fiduciary duty.

Dell has formed a special committee to take a close look at any potential deals on the table, multiple sources with knowledge of the matter told Reuters earlier.

(Reporting by Greg Roumeliotis in New York; Additional reporting by Poornima Gupta; editing by Carol Bishopric and Kenneth Barry)

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