Existing home sales rise to fastest pace in three years

WASHINGTON (Reuters) - Home resales rose sharply in November to their fastest pace in three years, a sign the recovery in the housing market is gaining steam.

The National Association of Realtors said on Thursday that existing home sales climbed 5.9 percent last month to a seasonally adjusted annual rate of 5.04 million units.

That was the fastest since November 2009, when a federal tax credit for home buyers was due to expire. Sales were well above the median forecast of a 4.87 million-unit rate in a Reuters poll.

The U.S. housing market tanked on the eve of the 2007-09 recession and has yet to fully recover, but steady job creation has helped the housing sector this year, when it is expected to add to economic growth for the first time since 2005.

NAR economist Lawrence Yun said superstorm Sandy, which slammed in the U.S. East Coast in late October and disrupted the regional economy for weeks, had only a slight negative impact on home resales.

The NAR expects some purchases delayed by the storm to add a slight boost to resales over the next few months, Yun said.

Nationwide, the median price for a home resale was $180,600 in November, up 10.1 percent from a year earlier as fewer people sold their homes under distressed conditions compared to the same period in 2011. Distressed sales include foreclosures.

The nation's inventory of existing homes for sale fell 3.8 percent during the month to 2.03 million, the lowest level since December 2001.

At the current pace of sales, inventories would be exhausted in 4.8 months, the lowest rate since September 2005.

Distressed sales fell to 22 percent of total sales from 29 percent a year ago.

The share of distressed sales, which also include those where the sales price was below the amount owed on the home, was also down from 24 percent in October.

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New York City should hike taxes on big business-comptroller

(Reuters) - New York City's top financial officer and possible contender for mayor in 2013, John Liu, proposed on Thursday tax hikes for big businesses and an end to Madison Square Garden's $15 million annual property tax exemption.
The proposals by New York City Comptroller John Liu include tax hikes on private equity firms, which would help offset his plan for $500 million in tax breaks and lowered fines for 90 percent of the city's small businesses.
Liu is expected to vie for the Democratic mayoral nomination for the election in November 2013.
The city could end tax breaks for big companies - more than $250 million of which were handed out last year, Liu said.
The city could also eliminate its $15 million annual property tax exemption for Madison Square Garden, the indoor arena in midtown Manhattan that's home to the New York Knicks basketball team. Madison Square Garden has been exempt from paying taxes on real property since 1982 under New York state law.
The arena is owned by The Madison Square Garden Co, which also owns the Knicks and other professional sports teams. The company also owns Radio City Music Hall, the Beacon Theatre and others venues, as well as television networks.
Liu also proposed examining tax breaks for special interests. Insurance companies, for instance, have not paid the general corporation tax since 1974, at a cost of $300 million annually to the city, he said.
Private equity firms could also start paying the unincorporated business tax for carried interest or gains from assets being held for investment. The exemption costs New York City about $200 million a year, Liu said.
Liu's package would use the revenue generated by those measures to offset his plan to ease the tax burden for small businesses.
He proposed ending the city's general corporation tax for all businesses with liabilities under $5,000 -- about 240,000 business in the city, or 85 percent of those that currently pay the tax.
His plan would also reduce some fines, as well as exempt businesses that make less than $250,000 in annual income from the city's unincorporated business tax.
The proposals would have to be approved by the governor and state legislature after a request by the city council.
The city is facing a possible $2.7 billion gap in fiscal 2014 that could grow to $3.8 billion the following year, Liu said.

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Republicans push own "fiscal cliff" plan; talks frozen

WASHINGTON (Reuters) - Republicans in the Congress pushed ahead on Thursday with a "fiscal cliff" plan that stands no chance of becoming law as time runs short to reach a deal with President Barack Obama to avert a Washington-induced economic recession.
House of Representatives Speaker John Boehner's "Plan B" to limit income-tax increases to the wealthiest sliver of the population appeared likely to pass the House on Thursday evening after it narrowly cleared a procedural hurdle in the afternoon.
However, Obama has vowed to veto the plan, and Senate Majority Leader Harry Reid said he will not bring it up for a vote in the Democratic-controlled chamber. White House spokesman Jay Carney called it a "multi-day exercise in futility."
Still, passage of Plan B could give Boehner the political cover he needs to strike a deal that would break with decades of Republican anti-tax orthodoxy.
"Time's running short. I'm going to do everything I can to protect as many Americans from an increase in taxes as I can," Boehner told a news conference.
Though it does not raise taxes on as many affluent Americans as Obama wants, the bill would put Republicans on record as supporting a tax increase on those who earn more than $1 million per year - a position the party opposed only weeks ago.
That could make it easier eventually to split the difference with Obama, who wants to lower the threshold to households that earn more than $400,000 annually. Obama also faces resistance on his left flank from liberals who oppose cuts to popular benefit programs, which Republicans say must be part of any deal.
Obama and Boehner will need to engage in more political theater to get lawmakers in both parties to sign on to the painful concessions that will have to be part of any deal to avert the cliff and rein in the national debt, analysts say.
"They are now in the mode where they have to demonstrate how hard they're trying to get everything they can," said Joe Minarik, a former Democratic budget official now with the Committee For Economic Development, a centrist think tank.
Even as he pressured Obama and the Democratic Senate to approve his plan, Boehner indicated that he was not willing to walk away from the bargaining table.
"The country faces challenges, and the president and I, in our respective roles, have a responsibility to work together to get them a result," Boehner said.
TIME RUNNING OUT
Obama and Boehner aim to reach a deal before the end of the year, when taxes will automatically rise for nearly all Americans and the government will have to scale back spending on domestic and military programs. The $600 billion hit to the economy could push the U.S. economy into recession, economists say.
Investors so far have assumed the two sides will reach a deal, but concerns over the fiscal cliff have weighed on markets in recent weeks. The S&P 500 index of U.S. stocks was up 0.4 percent in Thursday trading, despite a round of strong data on economic growth and housing.
"The closer we get to the end of the year without a deal, the more optimism is going to evaporate," said Todd Schoenberger, managing partner at LandColt Capital in New York.
Shares crept up after Boehner said he was prepared to work with Obama to prevent the fiscal cliff from kicking in.
Lawmakers are eager to wrap up their work and return home for the Christmas holiday, but congressional leaders kept the door open for last-minute action.
The Senate was expected to leave town on Thursday or Friday, but Reid said it could return next week to vote on any deal.
Boehner indicated the House would stay in session after Thursday's vote, scheduled for 7:45 p.m. EST (0045 GMT on Friday).
Several influential conservative groups have condemned Plan B, and some Republicans are expected to vote against it. But passage appeared likely after the House narrowly voted by 219 to 197 to bring the bill to the floor for debate.
The U.S. Chamber of Commerce, an influential business group that has often tangled with the Obama administration, offered grudging support.
"We are not comfortable allowing tax increases on anyone in this environment. However, we understand that, at times, politics requires compromise," the Chamber's top lobbyist, Bruce Josten, wrote in a letter to lawmakers.
To placate conservatives, Boehner also scheduled a vote on legislation that would shift $55 billion in scheduled defense cuts to cuts in food and health benefits for the poor and other domestic programs.
That measure also would roll back some of the Dodd-Frank financial regulation reforms of 2010. It is not expected to become law.

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Canada's seven-month budget gap narrows to C$10.6 billion

OTTAWA (Reuters) - Canada's federal budget deficit narrowed in the first seven months of the fiscal year to C$10.57 billion ($10.68 billion) from C$13.90 billion in the same period last year as personal and corporate income tax revenues rose and debt charges were lower.
The monthly shortfall in October was C$1.68 billion, compared with a gap of C$2.13 billion a year earlier, the Department of Finance said in a report on Friday.
The Conservative government in October pushed back by one year, to 2016-17, the date it expects to eliminate the deficit. Most economists believe that if the economy continues to grow, the books could be balanced sooner.
Ottawa has estimated a 2012-13 deficit of C$26 billion, including a C$1 billion cushion for risk.
In the April-October period, revenues increased by 3.6 percent, or C$4.9 billion, from the same period in 2011, pushed up by personal income tax and corporate income tax. Program expenses rose by 2 percent, or C$2.7 billion, on increases in elderly benefits and direct program expenses.
Public debt charges decreased 6.1 percent, or C$1.1 billion, on a lower effective interest rate.

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"Fiscal cliff" creates waiting game for payrolls firms

WASHINGTON/NEW YORK (Reuters) - At payroll processing businesses across the United States, the "fiscal cliff" stalemate in Washington means uncertainty over tax-withholding tables just days before the start of 2013.
The U.S. Internal Revenue Service still has not issued the tables for next year that show how much money employers should hold back from workers' paychecks to cover federal income taxes.
Payroll processors need the tables to get their systems geared up for the new year. The tables are set by many factors, including tax rates and annual inflation adjustments.
In anticipation of late-breaking developments, Rochester, New York-based Paychex Inc will be serving Buffalo chicken wings for staffers working late on New Year's Eve, said Frank Fiorille, an executive at the payroll processing giant.
"Our systems are flexible enough that we can wait almost up until the last minute and still make changes," he said.
The IRS appreciates of the impact of Congress' inaction.
"Since Congress is still considering changes to the tax law, we continue to closely monitor the situation," IRS spokesman Terry Lemons said in a statement. "We intend to issue guidance by the end of the year on appropriate withholding for 2013."
Tax rates are slated to rise sharply for most Americans if Congress and President Barack Obama fail to reach an agreement that averts the "fiscal cliff" approaching at year-end.
"The political process will determine one way or the other what" the IRS must do, said Scott Hodge, president of the Tax Foundation, a business-oriented tax research group.
For now, he said, from the tax-collection agency's viewpoint, "doing nothing is probably the best course." This would be because withholding tables distributed now might only have to be revised if Congress acts in the next few days.
Some payroll servicers are not waiting for formal IRS guidance. The American Payroll Association, which represents about 23,000 payroll professionals, told members on Friday to rely on 2012 withholding tables until the IRS releases the new forms for 2013.
The association said its decision was based on a statement earlier this month from an IRS official.
The agency would not confirm that policy on Friday.
Tax preparer H&R Block Inc said it will use 2012 tax-withholding tables if the 2013 tables are not issued.
Executives said they were frustrated with the uncertainty in Washington, but were doing their best to cope.
"We are not doctors or surgeons and this is not life threatening," said Rob Basso with Advantaged Payroll Services, an Auburn, Maine-based payroll processor that serves 30,000 businesses. "It is annoying and disruptive to people's lives, but we will get through it."

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No. 1 Notre Dame has underdog in its DNA

SOUTH BEND, Ind. (AP) — The rankings say Notre Dame is No. 1 going into the BCS championship against Alabama. Plenty of folks aren't buying it, starting with the oddsmakers who currently have the Crimson Tide as about a touchdown favorite for the Jan. 7 meeting in Miami between two of college football's proudest programs.
The Fighting Irish aren't sweating the point spread. In fact, it's pretty much business as usual for Notre Dame, which has a chance to become the first team since 1984 to start the season unranked and end it as national champions.
"Everybody thought everybody was better than us," defensive tackle Louis Nix III said Monday. "Oklahoma was better than us. USC was better than us.
"We get it. We know how everyone thinks. We're just Notre Dame. Overrated Notre Dame. No one gives us credit for anything. Just the luck of the Irish, I guess."
History suggests that being the underdog in the BCS title game hasn't been a bad thing. Of the 14 BCS championship games played since the system was implemented in 1998, seven have been won by the underdog.
Alabama was a slight underdog last year after losing to LSU in the regular season, and then shut out the Tigers with the national title on the line.
In the 2005 championship game between Texas and Southern California, Vince Young and the Longhorns felt as if they were being talked about as nothing more than a speed bump on the road to USC's coronation as one of the greatest teams in college football history. Plus, Young was still seething over coming in second to USC's Reggie Bush in the Heisman Trophy voting.
The result: Texas 41, USC 38, and a performance for the ages by Young.
The following season, Ohio State reached the national championship game with a perfect record, No. 1 ranking and a Heisman Trophy winner in quarterback Troy Smith. Florida was the Buckeyes opponent and the question was: Did the Gators even belong in game?
Urban Meyer, the Gators' coach, made sure his players got that message. Even if it meant stretching the truth a bit. After a month of being told that nobody thought they had a chance to beat Ohio State, the Gators routed the Buckeyes 41-14 to start the Southeastern Conference's run of six straight BCS championships.
It's impossible to quantify what, if any, effect being the underdog has actually had on any of those "upsets." Any team that gets to a championship game must be good in the first place.
Whether Notre Dame can or will use the slights — real or perceived — as motivation remains to be seen.
"I've used the technique before during my time as a head coach," Notre Dame coach Brian Kelly said about playing the underdog card. "I don't know that that is pertinent because it's a one-game deal. It's all or nothing.
"Both teams have different dynamics to deal with because of the long layoff. Preparation is more important than any kind of fire and brimstone speech that I can bring to them."
Offensive coordinator Chuck Martin said the coaches don't even need to bring it up. The Fighting Irish have played all season like a team with something to prove.
"I think it's a little bit part of our kids' DNA now," he said. "We don't have to use it as much as maybe early in the year when we went on the road to Michigan State and they were ranked eighth and nobody was thinking we were very good. I think we've kind of just built it into who we are. Everybody likes telling us what we're not good at — which is fine by us. One of our strengths is knowing what we're not very good at. We try to play to our strengths and play away from our weaknesses."
It's a style that has led to more than a few close calls on the way to Miami.
Notre Dame beat Purdue and BYU by three points each. The Irish needed three overtimes to beat Pittsburgh by a field goal and went to overtime against Stanford, too. In both the Pitt and Stanford games, Notre Dame caught a few breaks. A missed field goal here, a questionable call by the officials there.
Meanwhile, except for its upset loss to Texas A&M, Alabama has rarely been challenged on its way to a third BCS title game appearance in the past four seasons.
The Tide is outscoring its opponents by an average of 28 points per game. Notre Dame's average margin of victory is 16 points per game, as the Irish have leaned on Heisman Trophy finalists Manti Te'o and a stellar defense while they developed first-year starting quarterback Everett Golson.
"I understand why people say Alabama's going to win," said Nix, the 325-pound anchor of Notre Dame's defensive front. "Great offensive line. Good quarterback. Great guys on the edge. They've been in the national championship twice in the last three years. I would probably pick Alabama, too.
"At the end of the day it's all about what's on the scoreboard."

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Big Ten teams all underdogs in bowl season

DES MOINES, Iowa (AP) — The Big Ten spent much of the year as a national punch line.
It might get worse during bowl season.
The Big Ten could only fill seven of its eight predetermined bowl slots — and each of those bowl-bound teams is currently an underdog.
From the five-loss Wisconsin team that still wound up in the Rose Bowl to the 6-6 Purdue squad that fired its coach, the beleaguered Big Ten isn't expected to do much of anything in the postseason.
The league went just 1-6 in bowl games in 2008. According to odds makers, things could go even worse in 2012.
"I'm not apologizing for us to go to the Rose Bowl with five losses," Wisconsin athletic director Barry Alvarez said during his press conference to announce he would coach the Badgers in that game. "I didn't have anything to do with two teams being ineligible in our division. That allowed us to play in that championship game, and we soundly defeated the champion from the other side."
That they did, thumping Nebraska 70-31.
Still, the current symbol for the league's plight has to be Badgers (8-5, 4-4 Big Ten).
They finished four games behind Ohio State and one behind Penn State in the Leaders Division. But the Buckeyes and Nittany Lions weren't eligible for the Big Ten title game, and the Badgers made the most of their lucky break.
Wisconsin is currently in upheaval after Bret Bielema stunned nearly everyone by bolting for Arkansas a few weeks ago. Alvarez will lead the Badgers in their third straight Rose Bowl, where they're about a touchdown underdog to 11-2 Stanford. Afterward, he'll resume his search for a new coach.
"It will be a great challenge for us, but I think it's a good matchup. I think it's a great bowl matchup. The game hasn't changed," Alvarez said.
The way Wisconsin manhandled the Huskers also took some buzz out of the Capital One Bowl.
Nebraska (10-3, 7-1) fell to the game in Orlando following their loss to the Badgers. The Huskers face Georgia (11-2) in a matchup that would have looked like good on paper — in mid-November.
While the Bulldogs were within about 5 yards of beating Alabama and earning a shot at Notre Dame in the BCS national championship, the Huskers were embarrassed by the five-loss Badgers a few hours later.
Georgia is a 10-point favorite over the seemingly reeling Huskers.
"They're resilient," Nebraska coach Bo Pelini said. "They look forward to going out and playing again. They were hurting, but you know what, they are grown men. You move on. That's what you have to do. We'll be ready to go."
Perhaps no bowl matchup epitomizes the current gap between the Big Ten and the powerhouse Big 12 and SEC more than Purdue-Oklahoma State in the Heart of Dallas Bowl.
Even though the Boilermakers fired coach Danny Hope, they're still on a three-game winning streak. Yet the Cowboys, who at 7-5 are just a game better than Purdue, are an 18-point favorite.
That's the biggest line of the postseason — bigger than even Florida State over MAC champs Northern Illinois in the Orange Bowl.
Minnesota (6-6, 2-6) is also a heavy underdog in its matchup with Texas Tech in the Meineke Car Care Bowl, even though the Red Raiders (7-5) lost coach Tommy Tuberville to Cincinnati.
Even with all those apparent mismatches, going 0-7 is probably a long shot for the Big Ten.
Michigan (8-4, 6-2) and South Carolina should make for an entertaining Outback Bowl. Few would be surprised if the Wolverines won their second straight bowl game under coach Brady Hoke.
Northwestern (9-3, 5-3) can reach the 10-win plateau for just the third time with a win over Mississippi State in the Gator Bowl.
The Wildcats, who were perhaps the only Big Ten team that can claim they were underrated in 2012, are just a 2-point underdog.
"Our guys are hungry. This is an opportunity for 10 wins for this ball club and to potentially be ranked in the top 15 in the country. That's an unbelievable foundation of success that this senior class will have laid. Ten wins makes a good season great," Northwestern coach Pat Fitzgerald said.
Michigan State and TCU are also a virtual toss-up in the Buffalo Wild Wings Bowl.
The Spartans were one of the nation's most disappointing teams, but five of their six losses were by four points or less.
Michigan State coach Mark Dantonio is hoping his team can finally catch a few break.
His Big Ten colleagues might be thinking along those same lines.
"One play here, one play there, we're a different football team. But you have to play what you've got. We want to point our compass north. I believe the glass is half full, not half empty," Dantonio said.

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Big 12 basketball lacking depth this season

The top of the Big 12 looks familiar, with Kansas in first place and ranked in the top 10.
The rest of the league doesn't appear to be nearly as deep as usual this season, its first with West Virginia and TCU instead of Missouri and Texas A&M.
No. 24 Oklahoma State (8-1) is the only other league team to join the ninth-ranked Jayhawks (8-1) in the Top 25 and nobody else received a single vote for Monday's poll.
This wasn't entirely unexpected, of course. Missouri won the conference tournament before bolting for the SEC and its currently ranked 12th. But beyond the Cowboys, nobody has emerged as a serious threat to the Jayhawks with non-conference play winding down.
Big 12 teams are just 2-10 against opponents ranked in the Top 25 and the league is seventh in overall RPI — behind the Atlantic-10 and the Mountain West. The inconsistent play of Baylor and Texas has a lot to do with that.
The Bears (7-3) were picked to finish second in the preseason poll, while the Longhorns (6-4) were slotted fourth. But Baylor has been up and down, while the Longhorns could find themselves at 6-6 at the end of the week.
Baylor's biggest win was about as big a resume builder as a team could ask for. The Bears knocked off Kentucky in Rupp Arena on Dec. 1, 62-55, snapping the Wildcats 55-game home winning streak. But Kentucky later fell out of the Top 25and Baylor lost at home to Northwestern.
The Bears have already lost to Charleston in Waco. But they've got a chance to pick up a pair of quality wins before meeting Texas in the league opener on Jan. 5. Baylor hosts BYU and plays at Gonzaga on Dec. 28.
Baylor coach Scott Drew said he saw positive signs after his team led by just two at halftime before rallying to beat USC-Upstate, 73-57.
"Early in the year I think that you are always adjusting, changing and tweaking," Drew said. "I'm so pleased with this effort though because we were able to defend and still take care of the ball and win. I thought that we made some extra effort passes. We made a more conscious effort to get the ball inside. We're learning how to get more touches inside."
Texas is scuffling in part because of a challenging schedule and the absence of point guard Myck Kabongo (NCAA eligibility investigation) and forward Jaylen Boyd (left foot injury).
If the Longhorns want to turn their season around, this would a good week to get started.
Texas, which doesn't have an upperclassman in its starting lineup, hosts No. 23 North Carolina on Wednesday and plays at No. 20 Michigan State on Saturday. A pair of wins would be a massive boost for a team that has lost to Division II Chaminade and by 23 points to No. 15 Georgetown.
"You've just got to go into it with a mindset of getting better every day. Build on the positive. And that's what we've been trying to do as a young group," Texas freshman guard Javan Felix said.
Of course, not everyone in the Big 12 is off to a slow start.
Kansas brought a seven-game winning streak into this week. Oklahoma State has already beaten Tennessee and North Carolina State behind freshman point guard Marcus Smart, who is averaging 13 points, seven rebounds and 5.2 assists a game and is on the short list of the game's top freshmen.
New coach Bruce Weber got Kansas State off to a respectable 7-2 start, and Oklahoma beat old foe Texas A&M 64-54 on Saturday to move to 7-2.
Iowa State (8-3), which was picked to finish eighth in the league, has lost to three quality opponents; Cincinnati, UNLV and Iowa.
Coach Bob Huggins led West Virginia to five straight NCAA tournaments out of the brutal Big East. Right now, the Mountaineers find themselves last in the Big 12.
West Virginia (4-5), fresh off a 15-point loss to No. 2 Michigan, is one of the nation's worst shooting teams at just 38.9 percent. The Mountaineers have lost to Gonzaga and fellow Big 12 team Oklahoma, but they've also fallen to Davidson and Duquesne.
"We'll win. We've won before and we'll win again," Huggins said. "We've got to continue to guard better and we've got to continue to rebound the ball better."

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Notre Dame's Kelly wins AP coach of the year

SOUTH BEND, Ind. (AP) — After two seasons as Notre Damecoach, Brian Kelly decided he wasn't spending enough time doing the best part of his job: coaching players.

Kelly changed that in 2012, and he shuffled his staff. Then, with Kelly more in tune to his team and the assistants in sync with the head coach, Notre Dame went from unranked to top-ranked.

For leading the Fighting Irish to the BCS championship for the first time, Kelly was voted Associated Press college football coach of the year.

"When you're talking about the coach of the year, there's so many things that go into it," Kelly said. "I know it's an individual award and it goes to one guy, but the feelings that I get from it is you're building the right staff, that you've got the right players and to me that is a validation of the program. That you put together the right business plan."

Kelly received 25 votes from the AP college football poll panel. Penn State's Bill O'Brien was second with 14 votes. Stanford's David Shaw (four), Texas A&M's Kevin Sumlin (three), Kansas State's Bill Snyder (two) and Alabama's Nick Saban (one) also received votes.

Kelly is the first Notre Dame coach to win the AP award, which started in 1998.

Of course, the Irish haven't played for a national championship since 1988 and spent much of the past two decades trying to find a coach who could restore a program that was becoming a relic of its proud past.

It turns out Kelly was the answer.

He arrived in 2010 after two decades spent climbing the coaching ladder and winning big everywhere he worked. But in the world of college football, Notre Dame is a long way from Grand Valley State — where Kelly won Division II national titles — and Cincinnati, his previous stop, for that matter.

"I think the job tends to distract you," Kelly said earlier this week. "There are a lot of things that pull you away from the primary reason why you want to be head coach of Notre Dame, and that is graduate your players and play for a national championship.

"Now, to do that you have to have the pulse of your football team and you've got to have relationships with your players. If you're already going around the country doing other things other than working with your football team, it's hard to have the pulse of your team."

Kelly said he made a point of spending more time with the team this year.

"That's why I got into this. I want to develop 18 to 21 year olds. My development as the head coach at Notre Dame this year has been about getting back to why you would want to coach college players. You want to learn about them; you want to know their strengths and weaknesses; you want to help them with leadership skills; you want to help them when they're not feeling confident in their ability.

"For me, that is why it's been the most enjoyable year as the head coach at Notre Dame, is that I got a chance to spend more time with my team."

The first step, though, toward a successful 2012 season for Notre Dame can be traced to Feb. 10. On that day Kelly announced his coaching staff. The most notable change was moving Chuck Martinfrom defensive backs coach to offensive coordinator to fill the hole left when Charley Molnar became the coach of Massachusetts.

Martin was defensive coordinator for Kelly at Grand Valley State, then replaced his boss as head coach of the Division II power when Kelly was hired by Central Michigan after the 2003 season.

The move might have seemed odd to some, but Kelly, who built his reputation on offensive acumen, wanted a right-hand man who understood exactly what he wanted.

To replace Martin on the defensive side, Bob Elliot was hired from Iowa State to coach safeties. Harry Hiestand was hired away from Tennessee to replace offensive line coach Ed Warinner, and co-defensive coordinator Bob Diaco, who had been with Kelly at Central Michigan and Cincinnati, was promoted to assistant head coach.

"The voice of your coordinators has got to be in lock step with the head coach," Kelly said. "Now both of these guys have been with me a long time.

"Chuck Martin on offense, I wanted a voice that went back with me to Grand Valley State. And with Bob Diaco someone that goes back to Central Michigan with me. So yeah, it was important to get that voice right."

The last change Kelly needed to make involved Xs and Os. Kelly wanted to win now, but with a first-year starter and redshirt freshmen at quarterback. He had to adjust his style.

Out went the push-the-pace offense that had helped him reach two BCS games at Cincinnati. In came a more deliberate approach.

"We conduct the game differently," Martin said. "We set out how we thought this team could win with the personnel we had and with the young quarterback. Most people say 'OK, you're going to play the young guy, you're playing for the future.' We just went 12-0 with the young guy and he got yanked four times.

"The rest of the world wants 12-0 with no warts. We have plenty of warts. Somehow we're 12-0. Just goes to show the job (Kelly) did that we made it work week in and week out with what we have."

Kelly's ability and willingness to adapt have been his greatest strengths.

"He made some of his biggest changes ever in the last year. Going away from some things that really were his bread and butter, and 12-0 later, the guy did it again," Martin said.

"He saw what Notre Dame football needed in 2012 and he got to know this university."

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Spelman College to cut sports in bid to improve student health

ATLANTA (Reuters) - Spelman College, the oldest historically black U.S. college for women, is scrapping its competitive sports program in a bold effort to help students combat the troubling health statistics faced by African-American women.

The private school, based in Atlanta, Georgia, will cease competing against other colleges' athletic teams at the end of the current academic year. It will then put its $1 million annual sports budget toward improving the health of all 2,100 students, said college president Beverly Daniel Tatum.

The college plans to expand fitness programs such as strength training, Pilates and yoga, and is raising money for a new gymnasium, Tatum said.

The idea to try something different came after the National Collegiate Athletic Association Division III athletic conference Spelman belongs to decided to disband.

"I started thinking about the state-of-the art wellness program we could develop if we reallocated the money we were spending on the sports program that was benefiting a very small number of students," Tatum said. "We could flip that script, and we could put that money into a program for everyone."

Health statistics for African-American women are disturbing, Tatum said, with higher rates of obesity, diabetes and high blood pressure than other groups.

Fifty-one percent of black women over the age of 20 are obese, compared to 32.8 percent of white women, according to the American Heart Association.

An estimated 9.5 percent of African-American women have been diagnosed with diabetes, compared to 5.4 percent of white women, the Centers for Disease Control and Prevention said.

Spelman has 80 student athletes, and fields teams in volleyball, basketball, soccer, cross country, tennis, golf and softball. Division III teams are not allowed to offer sports scholarships, and Spelman does not recruit athletes, Tatum said.

The school's wellness program, on the other hand, has about 300 participants, nearly four times the number of student athletes. But the current wellness program has been limited by the sports teams, which often use athletic facilities for practice and games, Tatum said.

By expanding the broader program, "instead of learning how to play soccer or basketball, the focus will be on fitness for life," she said.

Tatum said she knew of no other college that has made a similar decision.

Colleges have been more likely to take the opposite approach - cutting physical education programs to fund sports, said Philip Haberstro, former president of the National Association for Health and Fitness.

The Spelman plan makes sense for many reasons, Haberstro said, including the potential to increase academic performance by improving the health of students.

"The mission of the college is education," he said. "I think there is a good, solid rationale for a college doing this."

Not everyone is pleased. Tatum said some student athletes upset about the decision have told her they were thinking about transferring.

"I understand the disappointment," she said. "I think the majority of them will still be with us, that there are other things they like about Spelman that they'll want to continue to be affiliated with. Certainly, that is my hope."

Sophomore Channing Carney-Filmore, who plays on the school's soccer team, said she initially was disappointed about the sports program being cut.

But she said she understood the greater potential benefit of instilling healthier lifestyles, though she doubted the idea would fly at larger schools with big sports programs.

"When you're at Spelman it makes sense," she said. "There aren't many people involved in sports. We're not known for our sports. We're known for academics."

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