Britain’s Central Banker Confident Over U.S. Budget Talks

Mervyn King, the outgoing governor of the Bank of England, expressed confidence in his successor and discussed economic challenges facing Britain and the United States in their approaches to monetary policy and financial regulation in a speech Tuesday at the Economic Club of New York.

Mr. King punted, however, on a question about how America’s severe, fiscal budget tightening scheduled for the end of the year might affect Britain.

“I have great confidence that one way or another,” the United States will avoid going over the so-called fiscal-cliff, he said, even if doing so means just barely hanging on by the country’s “finger tips.”

He did express concern at one point about the need to rebalance trade around the globe, as consumer-driven economies like the United States and Britain continue to run large trade deficits while export-driven countries like China run large surpluses.

“We haven’t found a solution to this,” he said, calling the pressures on deficit countries “inexorable.”

He said he feared that “in 2013 what we will see is growth in actively managed exchange rates” as an alternative to letting the market decide how much currencies are worth. Letting the market decide exchange rates would eventually make goods from trade-surplus economies like China more expensive and those from trade-deficit countries like the United States cheaper, which would help to rebalance global trade.

The tension between short-term and long-term policy goals, Mr. King said, is one of the challenges for other post-crisis policies, such as forcing banks to recapitalize or encouraging the government to whittle down its debt.

 “What seems to be the right thing to do in the short term is absolutely the opposite of what we need to do in the long term,” he said.

The Bank of England is Britain’s counterpart to the Federal Reserve and, as in the United States, the British central bank has been providing monetary stimulus to offset fiscal austerity measures pushed through the legislature.

Britain has had disappointing economic growth in the last two years, a fact that Mr. King also attributed to rising energy and commodity prices’ holding back consumer spending and the euro zone’s debt crisis.

“A black cloud of uncertainty has drifted across the channel,” he said, and it has diminished what might otherwise have been a stronger recovery in investment spending.

The Bank of England has engaged in three main policy initiatives to combat these drags on the economy: large-scale asset purchases, along the lines of what the Federal Reserve has pursued; a special program that rewards banks for lending by reducing their interest rates, called the “funding for lending scheme”; and designing new regulations intended to improve the health of the banking sector, such as requiring greater capitalization.

Asked whether the Bank of England would consider providing more explicit guidance about when it might eventually raise interest rates – as the Fed has done – Mr. King said, “We don’t think we have a crystal ball” about such decisions and so had no plans to provide a time frame.

Last month, the British government announced that Mr. King’s successor would be Mark J. Carney, the head of the Canadian central bank. Mr. Carney, who takes over in the summer, will be the first non-Briton to hold the position.

“I think he’ll do a great job, and they won’t miss me at all,” Mr. King said.

A key challenge for policy makers going forward, he said, was to “defend the market economy in the face of concerns among so many who suffered during the financial crisis,” particularly those who did not benefit from the boom before the crisis and are still extremely angry today.

“We need to support the legitimacy of the market economy,” he said.

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A Breakthrough Against Leukemia Using Altered T-Cells

PHILIPSBURG, Pa. — Emma Whitehead has been bounding around the house lately, practicing somersaults and rugby-style tumbles that make her parents wince.

It is hard to believe, but last spring Emma, then 6, was near death from leukemia. She had relapsed twice after chemotherapy, and doctors had run out of options.

Desperate to save her, her parents sought an experimental treatment at the Children’s Hospital of Philadelphia, one that had never before been tried in a child, or in anyone with the type of leukemia Emma had. The experiment, in April, used a disabled form of the virus that causes AIDS to reprogram Emma’s immune system genetically to kill cancer cells.

The treatment very nearly killed her. But she emerged from it cancer-free, and about seven months later is still in complete remission. She is the first child and one of the first humans ever in whom new techniques have achieved a long-sought goal — giving a patient’s own immune system the lasting ability to fight cancer.

Emma had been ill with acute lymphoblastic leukemia since 2010, when she was 5, said her parents, Kari and Tom. She is their only child.

She is among just a dozen patients with advanced leukemia to have received the experimental treatment, which was developed at the University of Pennsylvania. Similar approaches are also being tried at other centers, including the National Cancer Institute and Memorial Sloan-Kettering Cancer Center in New York.

“Our goal is to have a cure, but we can’t say that word,” said Dr. Carl June, who leads the research team at the University of Pennsylvania. He hopes the new treatment will eventually replace bone-marrow transplantation, an even more arduous, risky and expensive procedure that is now the last hope when other treatments fail in leukemia and related diseases.

Three adults with chronic leukemia treated at the University of Pennsylvania have also had complete remissions, with no signs of disease; two of them have been well for more than two years, said Dr. David Porter. Four adults improved but did not have full remissions, and one was treated too recently to evaluate. A child improved and then relapsed. In two adults, the treatment did not work at all. The Pennsylvania researchers were presenting their results on Sunday and Monday in Atlanta at a meeting of the American Society of Hematology.

Despite the mixed results, cancer experts not involved with the research say it has tremendous promise, because even in this early phase of testing it has worked in seemingly hopeless cases. “I think this is a major breakthrough,” said Dr. Ivan Borrello, a cancer expert and associate professor of medicine at the Johns Hopkins University School of Medicine.

Dr. John Wagner, the director of pediatric blood and marrow transplantation at the University of Minnesota, called the Pennsylvania results “phenomenal” and said they were “what we’ve all been working and hoping for but not seeing to this extent.”

A major drug company, Novartis, is betting on the Pennsylvania team and has committed $20 million to building a research center on the university’s campus to bring the treatment to market.

Hervé Hoppenot, the president of Novartis Oncology, called the research “fantastic” and said it had the potential — if the early results held up — to revolutionize the treatment of leukemia and related blood cancers. Researchers say the same approach, reprogramming the patient’s immune system, may also eventually be used against tumors like breast and prostate cancer.

To perform the treatment, doctors remove millions of the patient’s T-cells — a type of white blood cell — and insert new genes that enable the T-cells to kill cancer cells. The technique employs a disabled form of H.I.V. because it is very good at carrying genetic material into T-cells. The new genes program the T-cells to attack B-cells, a normal part of the immune system that turn malignant in leukemia.

The altered T-cells — called chimeric antigen receptor cells — are then dripped back into the patient’s veins, and if all goes well they multiply and start destroying the cancer.

The T-cells home in on a protein called CD-19 that is found on the surface of most B-cells, whether they are healthy or malignant.

A sign that the treatment is working is that the patient becomes terribly ill, with raging fevers and chills — a reaction that oncologists call “shake and bake,” Dr. June said. Its medical name is cytokine-release syndrome, or cytokine storm, referring to the natural chemicals that pour out of cells in the immune system as they are being activated, causing fevers and other symptoms. The storm can also flood the lungs and cause perilous drops in blood pressure — effects that nearly killed Emma.

Steroids sometimes ease the reaction, but they did not help Emma. Her temperature hit 105. She wound up on a ventilator, unconscious and swollen almost beyond recognition, surrounded by friends and family who had come to say goodbye.

But at the 11th hour, a battery of blood tests gave the researchers a clue as to what might help save Emma: her level of one of the cytokines, interleukin-6 or IL-6, had shot up a thousandfold. Doctors had never seen such a spike before and thought it might be what was making her so sick.

Dr. June knew that a drug could lower IL-6 — his daughter takes it for rheumatoid arthritis. It had never been used for a crisis like Emma’s, but there was little to lose. Her oncologist, Dr. Stephan A. Grupp, ordered the drug. The response, he said, was “amazing.”

Within hours, Emma began to stabilize. She woke up a week later, on May 2, the day she turned 7; the intensive-care staff sang “Happy Birthday.”

Since then, the research team has used the same drug, tocilizumab, in several other patients.

In patients with lasting remissions after the treatment, the altered T-cells persist in the bloodstream, though in smaller numbers than when they were fighting the disease. Some patients have had the cells for years.

Dr. Michel Sadelain, who conducts similar studies at the Sloan-Kettering Institute, said: “These T-cells are living drugs. With a pill, you take it, it’s eliminated from your body and you have to take it again.” But T-cells, he said, “could potentially be given only once, maybe only once or twice or three times.”

The Pennsylvania researchers said they were surprised to find any big drug company interested in their work, because a new batch of T-cells must be created for each patient — a far cry from the familiar commercial strategy of developing products like Viagra or cholesterol medicines, in which millions of people take the same drug.

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A Breakthrough Against Leukemia Using Altered T-Cells

PHILIPSBURG, Pa. — Emma Whitehead has been bounding around the house lately, practicing somersaults and rugby-style tumbles that make her parents wince.

It is hard to believe, but last spring Emma, then 6, was near death from leukemia. She had relapsed twice after chemotherapy, and doctors had run out of options.

Desperate to save her, her parents sought an experimental treatment at the Children’s Hospital of Philadelphia, one that had never before been tried in a child, or in anyone with the type of leukemia Emma had. The experiment, in April, used a disabled form of the virus that causes AIDS to reprogram Emma’s immune system genetically to kill cancer cells.

The treatment very nearly killed her. But she emerged from it cancer-free, and about seven months later is still in complete remission. She is the first child and one of the first humans ever in whom new techniques have achieved a long-sought goal — giving a patient’s own immune system the lasting ability to fight cancer.

Emma had been ill with acute lymphoblastic leukemia since 2010, when she was 5, said her parents, Kari and Tom. She is their only child.

She is among just a dozen patients with advanced leukemia to have received the experimental treatment, which was developed at the University of Pennsylvania. Similar approaches are also being tried at other centers, including the National Cancer Institute and Memorial Sloan-Kettering Cancer Center in New York.

“Our goal is to have a cure, but we can’t say that word,” said Dr. Carl June, who leads the research team at the University of Pennsylvania. He hopes the new treatment will eventually replace bone-marrow transplantation, an even more arduous, risky and expensive procedure that is now the last hope when other treatments fail in leukemia and related diseases.

Three adults with chronic leukemia treated at the University of Pennsylvania have also had complete remissions, with no signs of disease; two of them have been well for more than two years, said Dr. David Porter. Four adults improved but did not have full remissions, and one was treated too recently to evaluate. A child improved and then relapsed. In two adults, the treatment did not work at all. The Pennsylvania researchers were presenting their results on Sunday and Monday in Atlanta at a meeting of the American Society of Hematology.

Despite the mixed results, cancer experts not involved with the research say it has tremendous promise, because even in this early phase of testing it has worked in seemingly hopeless cases. “I think this is a major breakthrough,” said Dr. Ivan Borrello, a cancer expert and associate professor of medicine at the Johns Hopkins University School of Medicine.

Dr. John Wagner, the director of pediatric blood and marrow transplantation at the University of Minnesota, called the Pennsylvania results “phenomenal” and said they were “what we’ve all been working and hoping for but not seeing to this extent.”

A major drug company, Novartis, is betting on the Pennsylvania team and has committed $20 million to building a research center on the university’s campus to bring the treatment to market.

Hervé Hoppenot, the president of Novartis Oncology, called the research “fantastic” and said it had the potential — if the early results held up — to revolutionize the treatment of leukemia and related blood cancers. Researchers say the same approach, reprogramming the patient’s immune system, may also eventually be used against tumors like breast and prostate cancer.

To perform the treatment, doctors remove millions of the patient’s T-cells — a type of white blood cell — and insert new genes that enable the T-cells to kill cancer cells. The technique employs a disabled form of H.I.V. because it is very good at carrying genetic material into T-cells. The new genes program the T-cells to attack B-cells, a normal part of the immune system that turn malignant in leukemia.

The altered T-cells — called chimeric antigen receptor cells — are then dripped back into the patient’s veins, and if all goes well they multiply and start destroying the cancer.

The T-cells home in on a protein called CD-19 that is found on the surface of most B-cells, whether they are healthy or malignant.

A sign that the treatment is working is that the patient becomes terribly ill, with raging fevers and chills — a reaction that oncologists call “shake and bake,” Dr. June said. Its medical name is cytokine-release syndrome, or cytokine storm, referring to the natural chemicals that pour out of cells in the immune system as they are being activated, causing fevers and other symptoms. The storm can also flood the lungs and cause perilous drops in blood pressure — effects that nearly killed Emma.

Steroids sometimes ease the reaction, but they did not help Emma. Her temperature hit 105. She wound up on a ventilator, unconscious and swollen almost beyond recognition, surrounded by friends and family who had come to say goodbye.

But at the 11th hour, a battery of blood tests gave the researchers a clue as to what might help save Emma: her level of one of the cytokines, interleukin-6 or IL-6, had shot up a thousandfold. Doctors had never seen such a spike before and thought it might be what was making her so sick.

Dr. June knew that a drug could lower IL-6 — his daughter takes it for rheumatoid arthritis. It had never been used for a crisis like Emma’s, but there was little to lose. Her oncologist, Dr. Stephan A. Grupp, ordered the drug. The response, he said, was “amazing.”

Within hours, Emma began to stabilize. She woke up a week later, on May 2, the day she turned 7; the intensive-care staff sang “Happy Birthday.”

Since then, the research team has used the same drug, tocilizumab, in several other patients.

In patients with lasting remissions after the treatment, the altered T-cells persist in the bloodstream, though in smaller numbers than when they were fighting the disease. Some patients have had the cells for years.

Dr. Michel Sadelain, who conducts similar studies at the Sloan-Kettering Institute, said: “These T-cells are living drugs. With a pill, you take it, it’s eliminated from your body and you have to take it again.” But T-cells, he said, “could potentially be given only once, maybe only once or twice or three times.”

The Pennsylvania researchers said they were surprised to find any big drug company interested in their work, because a new batch of T-cells must be created for each patient — a far cry from the familiar commercial strategy of developing products like Viagra or cholesterol medicines, in which millions of people take the same drug.

Read More..

Mobile Video Calling Spreads as Smartphones and Tablets Improve

PALO ALTO, Calif. — The next competition in technology is your face — anywhere, anytime.

As the cameras and screens of smartphones and tablets improve, and as wireless networks offer higher bandwidth, more companies are getting into the business of enabling mobile video calls.

The details vary from one service to the next, but the experiences are similar: from anywhere in the world with a modern wireless network, a smartphone’s screen fills with the face of a friend or relative. The quality is about the same jerky-but-functional level as most desktop video. Sound is not always perfectly synced with the image, but it is very close. The calls start and end the same way, by pressing a button on the screen.

Mobile video calling has risen so quickly that industry analysts have not yet compiled exact numbers. But along the way, it is creating new business models, new stresses on mobile networks and even new rules of etiquette.

“All the communications — social messages, calls, texts and video — are merging fast,” said Eric Setton, co-founder and chief technology officer of Tango Mobile, whose free video calling service has 80 million active users. An additional 200,000 join daily, Mr. Setton said.

Once an interesting endeavor for a few start-ups like Tango, mobile video has caught the attention of big companies. Apple created FaceTime and made it a selling point for the iPad.

In September, the company made FaceTime available on cellular networks instead of limiting it to Wi-Fi systems, almost certainly in response to increasing consumer demand.

Last week, Yahoo purchased a video chat company called OnTheAir. And in 2011, Microsoft paid $8.5 billion for Skype, a service for both video and audio-only calls. Though most people use Skype on desktop and laptop computers, the software for the service has been downloaded more than 100 million times just by owners of phones running Google’s Android mobile operating system. Microsoft built a service for its Windows 8 mobile phone that lets people receive calls even when Skype is not on.

Google, which has more than 100 million people a month using its Google Plus social networking service, now offers more than 200 apps for its video calling feature. It says it is interested not in making money on the applications, but in learning more about them so it can sell more ads by getting people to use its free video service, called Hangouts. Hangouts can be used for two-person or group calls, or for a video conference with up to 10 people.

“On a high level, Google works better when we know who you are and what your interests are,” said Nikhyl Singhal, director of product management for Google’s real-time communications group. “Video calling is becoming a basic service across different fronts.” While Mr. Singhal is an occasional user, he said, his 4-year-old daughter “is on it every day.”

Don’t expect video calling to improve productivity. Tango uses the same technology that enables video calls to sell games that people can play simultaneously. It sells virtual decorations like balloons to drop around someone’s image during a birthday call (both parties see the festive pixels). Google says some jokey applications on Hangouts, like a feature that can put a mustache over each caller, seem to encourage people to talk longer.

Currently, popular two-way games like Words With Friends on Facebook work by one player making a move and then passing the game over to the other player, not watching moves as they are made. Another promising area is avatars, like cartoon dogs and cats, that mouth speech when a user wants to have a video call but does not want to be seen.

The prospect of having to appear on-screen at any given moment might sound like a nonstarter for people who worry about bad hair days. But in fact, using mobile devices for video calls may be less bother than it seems.

“There may be natural inhibitions to being seen, but when I’m on a mobile device I’m out and about, so I’m more likely to be presentable,” said Michael Gartenberg, a consumer technology analyst at Gartner. “How people use this remains to be seen, but they are starting to expect it.”

Yet a new etiquette for mobile video calls is already emerging. People often text each other first to see if it’s O.K. to appear on camera. Video messages sent in the text box of a phone, like snippets of a party or a child’s first steps, are also useful precursors to video conversations. Mr. Singhal said making avatars for users of Hangout would be “an extraordinarily important area” as well.

The greatest challenge for the business may not be getting more consumers to use the service, but making sure the service works. Most phones have slight variations in things like camera placement and video formatting from one model to the next. “A camera can show you upside down if you load the wrong software on it,” said Mr. Setton of Tango.

As a result, the 80 engineers among Tango’s 110 employees have adjusted their software to work on more than 1,000 types of phones worldwide. The top 20 models have more than a million customers each, but the complexity of building software for a wider range of phones has made it hard for new mobile video companies to enter the field, Mr. Setton said.

Tango’s average video call used to last six minutes, Mr. Setton said, but when the company started adding other applications to go with the videos, like games and designs that float over people, the average call length rose to 12 minutes.

Brian X. Chen contributed reporting.

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The New Islamists: Moroccans Fear That Flickers of Democracy Are Fading

TANGIER, Morocco — Until recently, politics in Morocco involved red carpets and speeches in high Arabic that the average citizen could not understand. But on a campaign swing this fall through a working-class area of this port city, Prime Minister Abdelilah Benkirane stood on a makeshift podium in a muddy vacant lot.

Articles in this series are exploring the rise of political Islam in the Middle East, as Islamic movements struggle to remake the Arab world.

Samuel Aranda for The New York Times

Morocco faces social challenges in places like the slum in Sale, near Rabat.

He spoke without notes, kissed babies passed forward by the crowd and promised, as he has done all along, to fight corruption and return the government to the people.

“We will get stronger with the help of God and accomplish what we wanted,” he told the crowd, which roared its approval.

But more and more Moroccans are questioning his ability to do that, wondering whether Morocco’s version of the Arab Spring brought anything more than cosmetic changes to this impoverished country, which has been one of America’s most stable and staunch allies in a region marked by turmoil.

A year ago, it seemed Moroccans were giddy with the sense that they had found a gentle, negotiated answer to the popular uprisings in the streets. The country’s king, Mohammed VI, 49, defused angry protesters by volunteering to share his power. Within months, Morocco had a new Constitution.

Mr. Benkirane’s moderate Islamist party, the Justice and Development Party, won a plurality in parliamentary elections in November. Western governments heaped praise on the election process, satisfied that this strategically important country, just 12 miles south of Spain and atop a changing and uncertain continent, was settling in to a new more democratic order. (This week Secretary of State Hillary Rodham Clinton is scheduled to visit Morocco for a meeting of the Friends of Syria.)

But these days, many here are questioning whether the king and his entourage really gave up anything at all. Telquel, perhaps the country’s most influential magazine, ran a cover story this fall saying that the palace had gradually taken back its concessions: the king’s shadow cabinet was interfering at will and was even sending its own emissaries to the United States and Brussels when Moroccan interests needed tending to. Mr. Benkirane, the magazine pointed out, had publicly admitted that the king’s advisers sometimes met with government officials without consulting him.

Some also point to a quiet clamping down on political activists. In October, the United Nations said there was evidence of a recent spike in reports of torture in Morocco. About 70 protesters associated with the pro-democracy February 20 Movement are still in prison. In May, a popular rapper was sentenced to a year in jail for a song about police corruption. And six political activists testified at a hearing in September that they had been physically — and sexually — abused after being arrested for protesting in July.

In other countries rocked by Arab Spring uprisings, tensions today are being felt largely over the role of Islam in government. These issues have come up in Morocco, too. But here, the larger tensions appear to be over the power of the old guard. Many Moroccans will not criticize the king, instead focusing on the network of power and privilege that surrounds him and the corruption that they believe sucks any hope of prosperity from this country.

The problems Morocco faces are enormous. The country has invested heavily in infrastructure: superhighways are everywhere and there are plans for a high-speed train, too. But 40 percent of the population cannot read or write. Forbes has estimated the king’s fortune to be more than $2 billion. But the average income here is low, roughly half of what it was in Tunisia, where the Arab Spring first took off.

Mr. Benkirane took office showing a flair for the dramatic. He quickly slashed ministerial salaries and perquisites, and he refused to move to the prime minister’s mansion. He also took on Morocco’s notorious cronyism. To widespread amazement, his government published the names of those who had been given lucrative bus licenses. Since then, however, his efforts have foundered.

Some critics say the prime minister has been outmaneuvered at every turn. Once last spring, Mr. Benkirane seemed to lash out at the king and his entourage, suggesting that protesters could easily return to the streets. But soon after, he said the remarks had been misunderstood.

Aida Alami contributed reporting.

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Changes to Agriculture Highlight Cuba’s Problems

HAVANA — Cuba’s liveliest experiment with capitalism unfolds every night in a dirt lot on the edge of the capital, where Truman-era trucks lugging fresh produce meet up with hundreds of buyers on creaking bicycle carts clutching wads of cash.

“This place, it feeds all of Havana,” said Misael Toledo, 37, who owns three small food stores in the city. “Before, you could only buy or sell in the markets of Fidel.”

The agriculture exchange, which sprang up last year after the Cuban government legalized a broader range of small businesses, is a vivid sign of both how much the country has changed, and of all the political and practical limitations that continue to hold it back.

President Raúl Castro has made agriculture priority No. 1 in his attempt to remake the country. He used his first major presidential address in 2007 to zero in on farming, describing weeds conquering fallow fields and the need to ensure that “anyone who wants can drink a glass of milk.”

No other industry has seen as much liberalization, with a steady rollout of incentives for farmers. And Mr. Castro has been explicit about his reasoning: increasing efficiency and food production to replace imports that cost Cuba hundreds of millions of dollars a year is a matter “of national security.”

Yet at this point, by most measures, the project has failed. Because of waste, poor management, policy constraints, transportation limits, theft and other problems, overall efficiency has dropped: many Cubans are actually seeing less food at private markets. That is the case despite an increase in the number of farmers and production gains for certain items. A recent study from the University of Havana showed that market prices jumped by nearly 20 percent in 2011 alone. And food imports increased to an estimated $1.7 billion last year, up from $1.4 billion in 2006.

“It’s the first instance of Cuba’s leader not being able to get done what he said he would,” said Jorge I. Domínguez, vice provost for international affairs at Harvard, who left Cuba as a boy. “The published statistical results are really very discouraging.”

A major cause: poor transportation, as trucks are in short supply, and the aging ones that exist often break down.

In 2009, hundreds of tons of tomatoes, part of a bumper crop that year, rotted because of a lack of transportation by the government agency charged with bringing food to processing centers.

“It’s worse when it rains,” said Javier González, 27, a farmer in Artemisa Province who described often seeing crops wilt and rot because they were not picked up.

Behind him were the 33 fertile, rent-free acres he had been granted as part of a program Mr. Castro introduced in 2008 to encourage rural residents to work the land. After clearing it himself and planting a variety of crops, Mr. Gonzalez said, he was doing relatively well and earned more last year than his father, who is a doctor, did.

But Cuba’s inefficiencies gnawed at him. Smart, strong, and ambitious, he had expansion plans in mind, even as in his hand he held a wrench. He was repairing a tractor part meant to be grading land. It was broken. Again.

The 1980s Soviet model tractor he bought from another farmer was as about good as it gets in Cuba. The Cuban government maintains a monopoly on selling anything new, and there simply is not enough of anything — fertilizer, or sometimes even machetes — to go around.

Government economists are aware of the problem. “If you give people land and no resources, it doesn’t matter what happens on the land,” said Joaquin Infante of the Havana-based Cuban National Association of Economists.

But Mr. Castro has refused to allow what many farmers and experts see as an obvious solution to the shortages of transportation and equipment: Let people import supplies on their own. “It’s about control,” said Philip Peters, a Cuba analyst with the Lexington Institute, a Virginia-based research group.

Other analysts agree, noting that though the agricultural reforms have gone farther than other changes — like those that allow for self-employment — they remain constrained by politics.

“The government is not ready to let go,” said Ted Henken, a Latin American studies professor at Baruch College. “They are sending the message that they want to let go, or are trying to let go, but what they have is still a mechanism of control.”

For many farmers, that explains why land leases last for 10 years with a chance to renew, not indefinitely or the 99 years offered to foreign developers. It is also why many farmers say they will not build homes on the land they lease, despite a concession this year to allow doing so.

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New Taxes to Take Effect to Fund Health Care Law

WASHINGTON — For more than a year, politicians have been fighting over whether to raise taxes on high-income people. They rarely mention that affluent Americans will soon be hit with new taxes adopted as part of the 2010 health care law.

The new levies, which take effect in January, include an increase in the payroll tax on wages and a tax on investment income, including interest, dividends and capital gains. The Obama administration proposed rules to enforce both last week.

Affluent people are much more likely than low-income people to have health insurance, and now they will, in effect, help pay for coverage for many lower-income families. Among the most affluent fifth of households, those affected will see tax increases averaging $6,000 next year, economists estimate.

To help finance Medicare, employees and employers each now pay a hospital insurance tax equal to 1.45 percent on all wages. Starting in January, the health care law will require workers to pay an additional tax equal to 0.9 percent of any wages over $200,000 for single taxpayers and $250,000 for married couples filing jointly.

The new taxes on wages and investment income are expected to raise $318 billion over 10 years, or about half of all the new revenue collected under the health care law.

Ruth M. Wimer, a tax lawyer at McDermott Will & Emery, said the taxes came with “a shockingly inequitable marriage penalty.” If a single man and a single woman each earn $200,000, she said, neither would owe any additional Medicare payroll tax. But, she said, if they are married, they would owe $1,350. The extra tax is 0.9 percent of their earnings over the $250,000 threshold.

Since the creation of Social Security in the 1930s, payroll taxes have been levied on the wages of each worker as an individual. The new Medicare payroll is different. It will be imposed on the combined earnings of a married couple.

Employers are required to withhold Social Security and Medicare payroll taxes from wages paid to employees. But employers do not necessarily know how much a worker’s spouse earns and may not withhold enough to cover a couple’s Medicare tax liability. Indeed, the new rules say employers may disregard a spouse’s earnings in calculating how much to withhold.

Workers may thus owe more than the amounts withheld by their employers and may have to make up the difference when they file tax returns in April 2014. If they expect to owe additional tax, the government says, they should make estimated tax payments, starting in April 2013, or ask their employers to increase the amount withheld from each paycheck.

In the Affordable Care Act, the new tax on investment income is called an “unearned income Medicare contribution.” However, the law does not provide for the money to be deposited in a specific trust fund. It is added to the government’s general tax revenues and can be used for education, law enforcement, farm subsidies or other purposes.

Donald B. Marron Jr., the director of the Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution, said the burden of this tax would be borne by the most affluent taxpayers, with about 85 percent of the revenue coming from 1 percent of taxpayers. By contrast, the biggest potential beneficiaries of the law include people with modest incomes who will receive Medicaid coverage or federal subsidies to buy private insurance.

Wealthy people and their tax advisers are already looking for ways to minimize the impact of the investment tax — for example, by selling stocks and bonds this year to avoid the higher tax rates in 2013.

The new 3.8 percent tax applies to the net investment income of certain high-income taxpayers, those with modified adjusted gross incomes above $200,000 for single taxpayers and $250,000 for couples filing jointly.

David J. Kautter, the director of the Kogod Tax Center at American University, offered this example. In 2013, John earns $160,000, and his wife, Jane, earns $200,000. They have some investments, earn $5,000 in dividends and sell some long-held stock for a gain of $40,000, so their investment income is $45,000. They owe 3.8 percent of that amount, or $1,710, in the new investment tax. And they owe $990 in additional payroll tax.

The new tax on unearned income would come on top of other tax increases that might occur automatically next year if President Obama and Congress cannot reach an agreement in talks on the federal deficit and debt. If Congress does nothing, the tax rate on long-term capital gains, now 15 percent, will rise to 20 percent in January. Dividends will be treated as ordinary income and taxed at a maximum rate of 39.6 percent, up from the current 15 percent rate for most dividends.

Under another provision of the health care law, consumers may find it more difficult to obtain a tax break for medical expenses.

Taxpayers now can take an itemized deduction for unreimbursed medical expenses, to the extent that they exceed 7.5 percent of adjusted gross income. The health care law will increase the threshold for most taxpayers to 10 percent next year. The increase is delayed to 2017 for people 65 and older.

In addition, workers face a new $2,500 limit on the amount they can contribute to flexible spending accounts used to pay medical expenses. Such accounts can benefit workers by allowing them to pay out-of-pocket expenses with pretax money.

Taken together, this provision and the change in the medical expense deduction are expected to raise more than $40 billion of revenue over 10 years.

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New Taxes to Take Effect to Fund Health Care Law

WASHINGTON — For more than a year, politicians have been fighting over whether to raise taxes on high-income people. They rarely mention that affluent Americans will soon be hit with new taxes adopted as part of the 2010 health care law.

The new levies, which take effect in January, include an increase in the payroll tax on wages and a tax on investment income, including interest, dividends and capital gains. The Obama administration proposed rules to enforce both last week.

Affluent people are much more likely than low-income people to have health insurance, and now they will, in effect, help pay for coverage for many lower-income families. Among the most affluent fifth of households, those affected will see tax increases averaging $6,000 next year, economists estimate.

To help finance Medicare, employees and employers each now pay a hospital insurance tax equal to 1.45 percent on all wages. Starting in January, the health care law will require workers to pay an additional tax equal to 0.9 percent of any wages over $200,000 for single taxpayers and $250,000 for married couples filing jointly.

The new taxes on wages and investment income are expected to raise $318 billion over 10 years, or about half of all the new revenue collected under the health care law.

Ruth M. Wimer, a tax lawyer at McDermott Will & Emery, said the taxes came with “a shockingly inequitable marriage penalty.” If a single man and a single woman each earn $200,000, she said, neither would owe any additional Medicare payroll tax. But, she said, if they are married, they would owe $1,350. The extra tax is 0.9 percent of their earnings over the $250,000 threshold.

Since the creation of Social Security in the 1930s, payroll taxes have been levied on the wages of each worker as an individual. The new Medicare payroll is different. It will be imposed on the combined earnings of a married couple.

Employers are required to withhold Social Security and Medicare payroll taxes from wages paid to employees. But employers do not necessarily know how much a worker’s spouse earns and may not withhold enough to cover a couple’s Medicare tax liability. Indeed, the new rules say employers may disregard a spouse’s earnings in calculating how much to withhold.

Workers may thus owe more than the amounts withheld by their employers and may have to make up the difference when they file tax returns in April 2014. If they expect to owe additional tax, the government says, they should make estimated tax payments, starting in April 2013, or ask their employers to increase the amount withheld from each paycheck.

In the Affordable Care Act, the new tax on investment income is called an “unearned income Medicare contribution.” However, the law does not provide for the money to be deposited in a specific trust fund. It is added to the government’s general tax revenues and can be used for education, law enforcement, farm subsidies or other purposes.

Donald B. Marron Jr., the director of the Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution, said the burden of this tax would be borne by the most affluent taxpayers, with about 85 percent of the revenue coming from 1 percent of taxpayers. By contrast, the biggest potential beneficiaries of the law include people with modest incomes who will receive Medicaid coverage or federal subsidies to buy private insurance.

Wealthy people and their tax advisers are already looking for ways to minimize the impact of the investment tax — for example, by selling stocks and bonds this year to avoid the higher tax rates in 2013.

The new 3.8 percent tax applies to the net investment income of certain high-income taxpayers, those with modified adjusted gross incomes above $200,000 for single taxpayers and $250,000 for couples filing jointly.

David J. Kautter, the director of the Kogod Tax Center at American University, offered this example. In 2013, John earns $160,000, and his wife, Jane, earns $200,000. They have some investments, earn $5,000 in dividends and sell some long-held stock for a gain of $40,000, so their investment income is $45,000. They owe 3.8 percent of that amount, or $1,710, in the new investment tax. And they owe $990 in additional payroll tax.

The new tax on unearned income would come on top of other tax increases that might occur automatically next year if President Obama and Congress cannot reach an agreement in talks on the federal deficit and debt. If Congress does nothing, the tax rate on long-term capital gains, now 15 percent, will rise to 20 percent in January. Dividends will be treated as ordinary income and taxed at a maximum rate of 39.6 percent, up from the current 15 percent rate for most dividends.

Under another provision of the health care law, consumers may find it more difficult to obtain a tax break for medical expenses.

Taxpayers now can take an itemized deduction for unreimbursed medical expenses, to the extent that they exceed 7.5 percent of adjusted gross income. The health care law will increase the threshold for most taxpayers to 10 percent next year. The increase is delayed to 2017 for people 65 and older.

In addition, workers face a new $2,500 limit on the amount they can contribute to flexible spending accounts used to pay medical expenses. Such accounts can benefit workers by allowing them to pay out-of-pocket expenses with pretax money.

Taken together, this provision and the change in the medical expense deduction are expected to raise more than $40 billion of revenue over 10 years.

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Bits Blog: Facebook Likely to End Experiment With Democracy

A half-million Facebook users have told the social network they do not want the company to change its privacy policy. Sounds impressive, right? Well, the only way that crowd will get its way and the status quo remain intact is if an additional 300 million people vote thumbs down before Monday. Odds of that happening? About zero.

Facebook says the changes to the policy are minor and beneficial for users. One concerns the integration of Instagram data with Facebook; another changes the filters for managing incoming messages. Privacy watchdogs disagree. So do those who bothered to vote: Shortly before noon Pacific time on Friday, 476,718 were against the proposed changes. A mere 68,884 were in favor.

But the really interesting change is that Facebook is proposing to end this system of direct voting, which was implemented in early 2009 after a major privacy flap. “If we are trying to move the world to being more open and transparent and to get people to share more information, having an open process around this is ultimately the only way to do that,” Mark Zuckerberg, Facebook’s founder, said at the time in a conference call.

The problem was that more than 30 percent of all Facebook users had to vote against a proposal for it to be binding. In the last vote, in June, the no’s outweighed the yeses by a ratio of six to one, but the total votes were less than one half of 1 percent of the users. That made the vote simply advisory. And so Facebook went ahead and implemented the changes anyway.

There has been relatively little commentary, much less outrage, about the new changes. One notable exception was Michael Phillips, who wrote a much-quoted piece in BuzzFeed, “The End of the Facebook Democracy”: “By repealing Facebook Suffrage, Facebook abandons a fundamental norm — that its users are citizens in a community, and not simply datapoints on an advertising algorithm. The vote may be quixotic, but if Facebook remains the indispensable social network, you’ll want to be able to tell your grandchildren you fought for Facebook freedom.”

Some users are trying to take their privacy into their own hands. They are reproducing the following text as a status update:

“In response to the new Facebook guidelines, I hereby declare that my copyright is attached to all of my personal details, status updates, messages, photos, videos and all other personal content that I post or have posted, online, as a result of the Berne Convention, on my personal profile page, or anyone else’s page, For commercial use of the above, MY WRITTEN CONSENT IS NEEDED AT ALL TIMES WITH NO EXCEPTION.”

Perhaps this makes them feel better. But in reality, it has no legal standing at all.

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Morsi Extends Compromise to Egyptian Opposition

Tara Todras-Whitehill for The New York Times

Protesters against President Mohamed Morsi next to a destroyed barricade near the presidential palace in Cairo on Saturday. More Photos »

CAIRO — Struggling to quell violent protests that have threatened to derail a referendum on an Islamist-backed draft constitution, President Mohamed Morsi of Egypt moved Saturday to appease his opponents with a package of concessions hours after state news media reported that he was moving toward imposing a form of martial law to secure the streets and allow the vote.

Mr. Morsi did not budge on a critical demand of the opposition: that he postpone the referendum set for next Saturday to allow a thorough overhaul of the proposed charter, which liberal groups say has inadequate protection of individual rights and provisions that could someday give Muslim religious authorities new influence.

But in a midnight news conference, his prime minister said Mr. Morsi was offering concessions that he had appeared to dismiss out of hand a few days before. The president rescinded most of his sweeping Nov. 22 decree that temporarily elevated his decisions above judicial review and drew tens of thousands of protesters into the streets calling for his downfall. He also offered a convoluted arrangement for the factions to negotiate constitutional amendments this week that would be added to the charter after the vote.

Taken together, the announcements, rolled out over a confusing day, appeared to indicate the president’s determination to do whatever it takes to get to the referendum, which his Islamist supporters say will lay the foundation of a new democracy and a return to stability.

Amid growing concerns among his advisers that the Interior Ministry might be unable to secure either the polls or the institutions of government in the face of renewed violent protests, the state media reported early Saturday that he would soon order the armed forces to keep order and authorize its solders to arrest civilians.

In recent days, mobs have attacked more than two dozen Muslim Brotherhood offices and ransacked the group’s headquarters, and more than seven people have died in street fighting between Islamists and their opponents.

As of early Sunday, Mr. Morsi had not yet formally issued an order calling out the military, raising the possibility that the announcement was intended as a warning to tell his opponents their protests would not derail the vote.

The moves on Saturday offered little hope of fully resolving the standoff, in part because opposition leaders had ruled out — even before his concessions were announced — any rushed attempt at a compromise just days before the referendum.

“No mind would accept dialogue at gunpoint,” said Mohamed Abu El Ghar, an opposition leader, alluding to previously floated ideas about last-minute talks for constitutional amendments.

Nor did Mr. Morsi’s Islamist allies expect his proposals to succeed. Many said they had concluded that much of the secular opposition was primarily interested in obstructing the transition to democracy at all costs, to try to block the Islamists from winning elections. Instead, some of the president’s supporters privately relished the bind they believed Mr. Morsi had built for the opposition by giving in to some demands, forcing their secular opponents to admit they are afraid to take their case to the ballot box.

For now, the military appears to back Mr. Morsi. Soon after the state newspaper Al Ahram suggested the president would impose martial law, a military spokesman read a statement over state television that echoed Mr. Morsi’s own speeches.

The military “realizes its national responsibility for maintaining the supreme interests of the nation and securing and protecting the vital targets, public institutions and the interests of the innocent citizens,” the spokesman said, warning of “divisions that threaten the State of Egypt.”

“Dialogue is the best and sole way to reach consensus that achieves the interests of the nation and the citizens,” he added. “Anything other than that puts us in a dark tunnel with drastic consequences, which is something that we will not allow.”

If Mr. Morsi goes through with the plan, it would represent a historic role reversal. For six decades, Egypt’s military-backed authoritarian presidents used martial law to hold on to power and to jail Islamists like Mr. Morsi, a former leader of the Muslim Brotherhood. It would also come just four months after he managed to pry power out of the hands of the country’s top generals, who had seized control when Hosni Mubarak was ousted last year and then held on to it for three months after Mr. Morsi’s election.

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