AP Top News at 12:40 p.m. EST

Associated Press
FILE - In this Nov. 3, 2010, file photo Senate Minority Leader Mitch McConnell of Ky. gestures on Capitol Hill in Washington. Newly empowered Republicans suggest the nation's small businesses will be clobbered if tax cuts for those in the highest income brackets are allowed to expire on Dec. 31. President Barack Obama and his Democratic allies argue the impact would be slight. Both can't be right. The truth lies somewhere in between. (AP Photo/Alex Brandon, File)

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FILE - In this Nov. 3, 2010, file photo Senate Minority Leader Mitch McConnell of Ky. gestures on Capitol …

President Barack Obama announced a two-year pay freeze for federal employees Monday, and warned the American public that the move is the first of many difficult decisions that must be made to reduce the nation's mounting deficits. "The hard truth is that getting this deficit under control is going to require some broad sacrifice, and that sacrifice must be shared by the employees of the federal government," Obama said.

WASHINGTON (AP) — Congress resumes its lame-duck session work Monday with the two parties sharply divided over how to deal with the George W. Bush-era tax cuts due to expire at year's end. President Barack Obama and most Democrats want to retain them for any couple earning $250,000 or less a year. Republicans are bent on making them permanent for everybody, including the richest.

NEW YORK (AP) — Holiday shoppers gave retailers a happy Thanksgiving weekend, crowding stores and malls more than last year. Add strong spending earlier this month and robust sales online, and retailers head into "Cyber Monday" encouraged. Particularly because many shoppers were buying for themselves, in addition to gifts, though mostly where they saw bargains.

WASHINGTON (AP) — Bristling over the unauthorized release of more than a quarter million classified State Department documents, the Obama White House on Monday ordered a government-wide review of how agencies safeguard sensitive information. Soon after, Attorney General Eric Holder told reporters at the Justice Department that the administration would prosecute if violations of federal law are found in a criminal investigation of the incident.

SEOUL, South Korea (AP) — South Korea's military announced provocative new artillery drills on the front-line island shelled in a deadly North Korean attack, then immediately postponed them Monday in a sign of disarray hours after the president vowed to get tough on the North. Similar live-fire maneuvers by South Korean troops one week earlier triggered the North's bombardment that decimated parts of Yeonpyeong Island, killed four people and drew return fire in a clash that set the region on edge.

CORVALLIS, Ore. (AP) — Patrols around mosques and other Islamic sites in Portland have been stepped up as Muslim leaders expressed fears of retribution, days after a Somali-American man was accused of trying to blow up a van full of explosives during the city's Christmas tree lighting ceremony. Portland Mayor Sam Adams said Sunday that he beefed up protection around mosques "and other facilities that might be vulnerable to knuckle-headed retribution" after hearing of the bomb plot.

TEL AVIV, Israel (AP) — Israel's prime minister said Monday that newly leaked U.S. diplomatic memos provide clear proof that the Arab world agrees with his country's assessment that Iran is the chief danger to the Middle East. According to the documents released Sunday by online whistle-blower Wikileaks, King Abdullah of Saudi Arabia repeatedly urged the United States to attack Iran to destroy its nuclear program. The king is just one of many Arab voices in the documents calling for tough action against Iran — proof that Israel is not alone in its belief that Tehran is a growing menace to the region, Prime Minister Benjamin Netanyahu said.

PARIS (AP) — A retired French electrician and his wife have come forward with 271 undocumented, never-before-seen works by Pablo Picasso estimated to be worth at least 60 million euros ($79.35 million), an administrator of the artist's estate said Monday. The electrician, who once worked for Picasso, and his wife for years squirreled away the staggering trove — which is believed to be authentic — inside a trunk in the garage of their home on the French Riviera.

LOS ANGELES (AP) — Despite decades spent playing sober commanders and serious captains, Leslie Nielsen insisted that he was always made for comedy. He proved it in his career's second act. "Surely you can't be serious," an airline passenger says to Nielsen in "Airplane!" the 1980 hit that turned the actor from dramatic leading man to comic star.

Duke is a unanimous No. 1 choice in The Associated Press' college basketball poll, and Connecticut has made the second-most impressive jump into the rankings since 1989. The Blue Devils received all 65 first-place votes from the national media panel Monday. Ohio State, Pittsburgh and Kansas moved up to be second through fourth. Kansas State and Michigan State lost last week and dropped to fifth and sixth.

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