DealBook: Leniency Denied, UBS Unit Admits Guilt in Rate Case

UBS on Wednesday became the first big global bank in more than two decades to have a subsidiary plead guilty to fraud.

UBS, the Swiss bank, scrambled until the last minute to avoid that fate. A week ago, in a bid for leniency over interest-rate manipulation, the bank’s chairman traveled to Washington to plead his case to the Justice Department, according to people briefed on the matter. Knowing the long odds, the chairman, Axel Weber, asked the criminal division for a lighter punishment.

But the government did not budge. With support from Attorney General Eric H. Holder Jr., the agency’s criminal division decided the bank’s actions were simply too egregious, people briefed on the matter said.

On Wednesday, UBS announced it would plead guilty to one count of felony wire fraud as part of a broader settlement. With federal prosecutors, British, Swiss and American regulators secured about $1.5 billion in fines, more than triple the only other rate-rigging case, against Barclays. The Justice Department also filed criminal charges against two former UBS traders.

The guilty plea and the individual charges provide the Justice Department with a long-awaited case to prove it is taking a hard line against financial wrongdoing.

Since the financial crisis, the government has faced criticism that it has not brought significant criminal actions. The money-laundering case against HSBC, which averted indictment when it agreed instead last week to pay $1.9 billion, raised more concerns that the world’s largest and most interconnected banks were too big to indict.

With UBS, prosecutors wanted to send a warning.

The Justice Department’s decision stops short of imperiling the broader financial system because it shields UBS’s parent company from losing its charter, among other major repercussions. But by securing a guilty plea against a subsidiary, the department has shown that it is willing to punish severely one of the world’s most powerful banks. It was the first guilty plea from a major financial institution since Drexel Burnham Lambert admitted to six counts of fraud in 1989.

“We are holding those who did wrong accountable,” Lanny A. Breuer, the head of the Justice Department’s criminal division, said at a news conference on Wednesday. “We cannot, and we will not, tolerate misconduct on Wall Street.”

The rate-rigging inquiry, which has ensnared more than a dozen big banks, is focused on major benchmarks like the London interbank offered rate, or Libor. Such rates are central to determining the borrowing rates for trillions of dollars of financial products like corporate loans, mortgages and credit cards.

The fallout from the UBS case is expected to increase pressure on some of the world’s largest financial institutions and spur settlement talks across the banking industry. The Royal Bank of Scotland has said it expects to pay fines before its next earnings statement in February, while American institutions, including JPMorgan Chase, also remain in regulators’ cross hairs.

The UBS case highlighted a pattern of abuse that authorities have uncovered in a multiyear investigation into the rate-setting process. The government complaints laid bare a 10-year scheme, describing how the bank had reported false rates to squeeze out extra profits and deflect concerns about its health during the financial crisis.

“The settlement reflects the magnitude of the wrongdoing and how critical it is that these be honest and reliable,” said Gary S. Gensler, chairman of the Commodity Futures Trading Commission, the American regulator that opened the UBS investigation.

Six months ago, authorities did not seem ready to take an aggressive stance with UBS.

They had just scored their first Libor settlement, a $450 million payout from Barclays. UBS, which had already struck a conditional immunity deal with the Justice Department’s antitrust division, figured its penalty would be similar.

The immunity deal, some UBS executives contended, would protect the bank from criminal charges. Even officials at the Justice Department were skeptical about the prospect of levying large penalties, according to people briefed on the matter.

Then the tone shifted this fall. After examining thousands of e-mails and hours of taped phone calls, the agency’s criminal division concluded that the conduct at the Japanese subsidiary warranted a criminal charge.

Agency officials also cited the bank’s repeated run-ins with authorities. For example, the Swiss bank had agreed in 2009 to pay $780 million to settle charges that it had helped clients avoid taxes.

Not everyone in the Justice Department agreed on the course of action. According to people briefed on the matter, the antitrust unit pushed for less-onerous penalties, citing the cooperation of UBS. With officials split over how to proceed, Mr. Holder cast the deciding vote in favor of securing a guilty plea from the subsidiary.

The move caught UBS off guard. The bank dispatched several lawyers to Washington to negotiate the fine print of the deal, setting up makeshift offices at the Four Seasons hotel in Georgetown.

Mr. Weber joined the lawyers, in a typical last-ditch appeal to the criminal division. Last Wednesday, Mr. Weber and his general counsel explained to the agency how UBS had overhauled its management ranks, bolstered internal controls and generally tried to clean up its act.

Mr. Breuer and other Justice Department officials agreed to consider the bank’s request to abandon the guilty plea, people briefed on the talks said. But hours later, a prosecutor phoned to say the agency was standing firm.

UBS agreed to the guilty plea, conceding that the Japanese unit would otherwise most likely face an indictment. In turn, prosecutors credited the bank for its recent efforts to improve.

“We are pleased that the authorities gave us credit for the important and positive changes we have already made,” Mr. Weber said in a statement.

The Commodity Futures Trading Commission adopted a similarly tough attitude.

Since Thanksgiving, UBS has tried to negotiate lower penalties with the regulator, according to people briefed on the matter. But David Meister, the agency’s enforcement chief, would not back down from $700 million in fines, an agency record.

“Even for a megabank, that amount serves as a direct deterrent,” said Bart Chilton, a commissioner at the regulator.

Authorities’ strict stance stems from the extent of the bank’s actions. The Commodity Futures Trading Commission cited more than 2,000 instances of illegal acts involving dozens of UBS employees across continents.

The most significant wrongdoing took place within the Japanese unit, where traders colluded with other banks and brokerage firms to tinker with yen-denominated Libor and bolster their returns.

In colorful e-mails, instant messages and phone calls, traders tried to influence the rates. “I need you to keep it as low as possible,” one UBS trader said to an employee at another brokerage firm, according to the complaint filed by the Financial Services Authority of Britain.

As the employees carried out the ostensible manipulation, they also celebrated the efforts, with one trader referring to a partner in the scheme as “superman.” “Be a hero today,” he urged, according the complaint.

The Justice Department also took aim at two former UBS traders, Tom Hayes, 33, and Roger Darin, 41, bringing the first criminal charges against individuals connected to the Libor case.

Like other traders at UBS, Mr. Hayes was willing to reward others for their efforts. He trumpeted the work of an outside broker who had helped, writing in a message, “i reckon i owe him a lot more.” Another broker responded that the person was “ok with an annual champagne shipment,” and “a small bonus every now and then.”

As prosecutors ramped up their investigation, Mr. Hayes even tried to dissuade former colleagues from cooperating, the complaint said. “The U.S. Department of Justice, mate, you know,” he said, they are the “dudes who…put people in jail. Why…would you talk to them?”

Mark Scott, Ashley Southall and Julia Werdigier contributed reporting.

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Officials Confront Skepticism Over Health Law

On its face, the low-key discussion around a conference table in Miami last month did not appear to have national implications. Eight men and women, including a diner owner, a chef and a real estate agent, answered questions about why they had no health insurance and what might persuade them to buy it.

But this focus group, along with nine others held around the country in November, was an important tool for advocates coming up with a campaign to educate Americans about the new health care law. The participants were among millions of uninsured people who stand to benefit from the law. With incomes below 400 percent of the poverty level, or $92,200 for a family of four this year, the focus group members will qualify for federal subsidies to help cover the cost of private insurance starting in 2014.

The sessions confirmed a daunting reality: Many of those the law is supposed to help have no idea what it could do for them. In the Miami focus group, a few participants knew only that they could face a fine if they did not buy coverage.

“It’s another forced bill,” said Christopher Pena, 24, who works in customer service.

There lies the challenge for Enroll America, a nonprofit group formed last year to get the word out to the uninsured and encourage them get coverage, providing help along the way. With the election over and the law almost certain to survive, the group is honing its fund-raising and testing strategies for persuading people to sign up for health insurance — a process that will begin in less than a year.

Starting next October, people will be able to shop for coverage, or find out if they are eligible for Medicaid, through online markets known as insurance exchanges.

“Our job is to convey to them that there is help coming that they didn’t know about,” said Rachel Klein, Enroll America’s executive director.

The group has raised only about $6 million so far — but financial backers include some major players in the medical industry: insurers like Aetna and Blue Cross Blue Shield, associations representing both brand name and generic drug manufacturers, hospitals and the Catholic Health Association. Insurance companies generally opposed the law before its passage in 2010 but now have a stake in its success.

Over the next two years, the group hopes to raise as much as $100 million for advertising, social media and other outreach efforts. “There are so many different groups that can play some role in this: hospitals, community health centers, pharmacies, tax preparers,” said Ron Pollack, chairman of Enroll America’s board. “Our job has got to be to try to galvanize each of those sectors, so there is a wide variety of ways people potentially can hear about this.”

Although the campaign will be national, the group will devote more resources to some states than to others. About half of the nation’s uninsured population lives in six states: California, Florida, Georgia, Illinois, New York and Texas. Of those, states whose leaders remain opposed to the health care law, like Texas, will probably get the most attention, Mr. Pollack said.

At the same time, Enroll America will coordinate with states, many of which are planning their own outreach and enrollment efforts, and with the Obama administration.

The Department of Health and Human Services has already awarded a $3.1 million contract to Weber Shandwick, a public relations firm, to plan a national education campaign for next year. It plans to seek proposals soon for a larger contract with a public relations firm that would help with the actual campaign, officials there said. Although the campaign has yet to take shape, an administration official confirmed that President Obama will play a role as it moves forward.

Republicans in Congress have already criticized the administration for spending taxpayer money to promote the law. Last month, Representative Dave Camp of Michigan, who leads the Ways and Means Committee, subpoenaed Kathleen Sebelius, the secretary of health and human services, seeking information on “public relations campaigns, advertisements, polling, message testing, and similar services.”

In addition to holding focus groups in Miami, Philadelphia, San Antonio and Columbus, Ohio, Enroll America commissioned a nationwide survey to help hone its message. The survey, conducted in September and October by Lake Research Partners, a Democratic polling group, found that the vast majority of uninsured people are unaware of the new coverage options provided by the law.

They are also skeptical. Many who participated in the focus groups or survey reported bad experiences trying to get health insurance, and doubted that the law would provide coverage that was both affordable and comprehensive.

“It’s two major mountains that need to be climbed,” Mr. Pollack said. “People are unaware of the benefits that could be provided to them, and they have to overcome skepticism, based on their past experiences with trying to obtain insurance.”

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Officials Confront Skepticism Over Health Law

On its face, the low-key discussion around a conference table in Miami last month did not appear to have national implications. Eight men and women, including a diner owner, a chef and a real estate agent, answered questions about why they had no health insurance and what might persuade them to buy it.

But this focus group, along with nine others held around the country in November, was an important tool for advocates coming up with a campaign to educate Americans about the new health care law. The participants were among millions of uninsured people who stand to benefit from the law. With incomes below 400 percent of the poverty level, or $92,200 for a family of four this year, the focus group members will qualify for federal subsidies to help cover the cost of private insurance starting in 2014.

The sessions confirmed a daunting reality: Many of those the law is supposed to help have no idea what it could do for them. In the Miami focus group, a few participants knew only that they could face a fine if they did not buy coverage.

“It’s another forced bill,” said Christopher Pena, 24, who works in customer service.

There lies the challenge for Enroll America, a nonprofit group formed last year to get the word out to the uninsured and encourage them get coverage, providing help along the way. With the election over and the law almost certain to survive, the group is honing its fund-raising and testing strategies for persuading people to sign up for health insurance — a process that will begin in less than a year.

Starting next October, people will be able to shop for coverage, or find out if they are eligible for Medicaid, through online markets known as insurance exchanges.

“Our job is to convey to them that there is help coming that they didn’t know about,” said Rachel Klein, Enroll America’s executive director.

The group has raised only about $6 million so far — but financial backers include some major players in the medical industry: insurers like Aetna and Blue Cross Blue Shield, associations representing both brand name and generic drug manufacturers, hospitals and the Catholic Health Association. Insurance companies generally opposed the law before its passage in 2010 but now have a stake in its success.

Over the next two years, the group hopes to raise as much as $100 million for advertising, social media and other outreach efforts. “There are so many different groups that can play some role in this: hospitals, community health centers, pharmacies, tax preparers,” said Ron Pollack, chairman of Enroll America’s board. “Our job has got to be to try to galvanize each of those sectors, so there is a wide variety of ways people potentially can hear about this.”

Although the campaign will be national, the group will devote more resources to some states than to others. About half of the nation’s uninsured population lives in six states: California, Florida, Georgia, Illinois, New York and Texas. Of those, states whose leaders remain opposed to the health care law, like Texas, will probably get the most attention, Mr. Pollack said.

At the same time, Enroll America will coordinate with states, many of which are planning their own outreach and enrollment efforts, and with the Obama administration.

The Department of Health and Human Services has already awarded a $3.1 million contract to Weber Shandwick, a public relations firm, to plan a national education campaign for next year. It plans to seek proposals soon for a larger contract with a public relations firm that would help with the actual campaign, officials there said. Although the campaign has yet to take shape, an administration official confirmed that President Obama will play a role as it moves forward.

Republicans in Congress have already criticized the administration for spending taxpayer money to promote the law. Last month, Representative Dave Camp of Michigan, who leads the Ways and Means Committee, subpoenaed Kathleen Sebelius, the secretary of health and human services, seeking information on “public relations campaigns, advertisements, polling, message testing, and similar services.”

In addition to holding focus groups in Miami, Philadelphia, San Antonio and Columbus, Ohio, Enroll America commissioned a nationwide survey to help hone its message. The survey, conducted in September and October by Lake Research Partners, a Democratic polling group, found that the vast majority of uninsured people are unaware of the new coverage options provided by the law.

They are also skeptical. Many who participated in the focus groups or survey reported bad experiences trying to get health insurance, and doubted that the law would provide coverage that was both affordable and comprehensive.

“It’s two major mountains that need to be climbed,” Mr. Pollack said. “People are unaware of the benefits that could be provided to them, and they have to overcome skepticism, based on their past experiences with trying to obtain insurance.”

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State of the Art: Android Cameras From Nikon and Samsung Go Beyond Cellphones - Review

60 Seconds With Pogue: Android Cameras:
David Pogue reviews the Nikon Coolpix S800C and the Samsung Galaxy Camera.

“Android camera.” Wow, that has a weird ring, doesn’t it? You just don’t think of a camera as having an operating system. It’s like saying “Windows toaster” or “Unix jump rope.”

But yes, that’s what it has come to. Ever since cellphone cameras got good enough for everyday snapshots, camera sales have been dropping. For millions of people, the ability to share a fresh photo wirelessly — Facebook, Twitter, e-mail, text message — is so tempting, they’re willing to sacrifice a lot of real-camera goodness.

That’s an awfully big convenience/photo-quality swap. A real camera teems with compelling features that most phones lack: optical zoom, big sensor, image stabilization, removable memory cards, removable batteries and decent ergonomics. (A four-inch, featureless glass slab is not exactly optimally shaped for a hand-held photographic instrument.)

But the camera makers aren’t taking the cellphone invasion lying down. New models from Nikon and Samsung are obvious graduates of the “if you can’t beat ’em, join ’em” school. The Nikon Coolpix S800C ($300) and Samsung’s Galaxy Camera ($500 from AT&T, $550 from Verizon) are fascinating hybrids. They merge elements of the cellphone and the camera into something entirely new and — if these flawed 1.0 versions are any indication — very promising.

From the back, you could mistake both of these cameras for Android phones. The big black multitouch screen is filled with app icons. Yes, app icons. These cameras can run Angry Birds, Flipboard, Instapaper, Pandora, Firefox, GPS navigation programs and so on. You download and run them exactly the same way. (That’s right, a GPS function. “What’s the address, honey? I’ll plug it into my camera.”)

But the real reason you’d want an Android camera is wirelessness. Now you can take a real photo with a real camera — and post it or send it online instantly. You eliminate the whole “get home and transfer it to the computer” step.

And as long as your camera can get online, why stop there? These cameras also do a fine job of handling Web surfing, e-mail, YouTube videos, Facebook feeds and other online tasks. Well, as fine a job as a phone could do, anyway.

You can even make Skype video calls, although you won’t be able to see your conversation partner; the lens has to be pointing toward you.

Both cameras get online using Wi-Fi hot spots. The Samsung model can also get online over the cellular networks, just like a phone, so you can upload almost anywhere.

Of course, there’s a price for that luxury. Verizon charges at least $30 a month if you don’t have a Verizon plan, or $5 if you have a Verizon Share Everything plan. AT&T charges $50 a month or more for the camera alone, or $10 more if you already have a Mobile Share plan.

If you have a choice, Verizon is the way to go. Not only is $5 a month much more realistic than $10 a month, but Verizon’s 4G LTE network is far faster than AT&T’s 4G network. That’s an important consideration, since what you’ll mostly be doing with your 4G cellular camera is uploading big photo files. (Wow. Did I just write “4G cellular camera?”)

These cameras offer a second big attraction, though: freedom of photo software. The Android store overflows with photography apps. Mix and match. Take a shot with one app, crop, degrade and post it with Instagram.

Just beware that most of them are intended for cellphones, so they don’t recognize these actual cameras’ optical zoom controls. Some of the photo-editing apps can’t handle these cameras’ big 16-megapixel files, either. Unfortunately, you won’t really know until you pay the $1.50 or $4 to download these apps.

E-mail: pogue@nytimes.com

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Four State Department Officials Are Out After Benghazi Report

WASHINGTON — Four State Department officials were removed from their posts on Wednesday after an independent panel criticized the “grossly inadequate” security at a diplomatic compound in Benghazi, Libya, that was attacked on Sept. 11, leading to the deaths of Ambassador J. Christopher Stevens and three other Americans.

Eric J. Boswell, the assistant secretary of state for diplomatic security, resigned. Charlene R. Lamb, the deputy assistant secretary responsible for embassy security, and another official in the diplomatic security office whom officials would not identify were relieved of their duties. So was Raymond Maxwell, a deputy assistant secretary who had responsibility for North Africa. The four officials, a State Department spokeswoman said, “have been placed on administrative leave pending further action.” 

The report criticized officials in the State Department’s Bureau for Diplomatic Security as having displayed a “lack of proactive leadership.” It also said that some officials in the Bureau of Near Eastern Affairs “showed a lack of ownership of Benghazi’s security issues.” 

The report did not criticize more senior officials, including Patrick F. Kennedy, the under secretary for management, who has vigorously defended the State Department’s decision-making on Benghazi to Congress.

At a news conference at the State Department on Wednesday, Thomas R. Pickering, a former ambassador who led the independent review, said that most of the blame should fall on officials in the two bureaus.

“We fixed it at the assistant secretary level, which is, in our view, the appropriate place to look, where the decision-making in fact takes place, where, if you like, the rubber hits the road,” said Mr. Pickering, who did not identify the officials.

At the same time, the report that Mr. Pickering oversaw suggested that there was a culture of “husbanding resources” at senior levels of the State Department that contributed to the security deficiencies in Benghazi. Without identifying Mr. Kennedy or other senior officials, the report said that attitude “had the effect of conditioning a few State Department managers to favor restricting the use of resources as a general orientation.”

Two deputy secretaries of state, William J. Burns and Thomas R. Nides, are scheduled to testify to Congressional committees on Thursday. The question of whether senior officials at the State Department should be held accountable is likely to be raised by lawmakers at the hearing.

“The board severely critiques a handful of individuals, and they have been held accountable,” said Representative Ed Royce, Republican of California, who is the incoming chairman of the House Foreign Affairs Committee. “The degree that others bear responsibility warrants Congressional review, given the report’s rather sweeping indictment. And the Foreign Affairs Committee must hear from Secretary of State Hillary Rodham Clinton concerning her role, which this report didn’t address.”

Mrs. Clinton, in a letter to Congress, outlined a number of steps the department is taking to improve security, including hiring hundreds of additional Marine guards for high-risk embassies and consulates around the world.

In an apparent gesture of support for the American diplomatic corps, President Obama — speaking at a diplomatic reception at the State Department on Wednesday night — praised the department’s personnel, who he said often worked “at great risk.”

Another issue that might be raised and that was largely skirted by the panel, concerns what role the American military should play in protecting diplomats abroad.

The Pentagon had no forces that could be readily sent to Benghazi when the crisis unfolded. The closest AC-130 gunship was in Afghanistan. There are no armed drones thought to be within range of Libya. There was no Marine expeditionary unit — a large seaborne force with its own helicopters — in the Mediterranean Sea. The Africa Command, whose area of operation includes North Africa, also did not have on hand its own force able to respond rapidly to emergencies — a Commanders’ In-Extremis Force, or C.I.F. Every other regional command had one at the time.

The Defense Department has repeatedly declined to say whether the Africa Command requested that any of these forces be on hand during the anniversary of the Sept. 11, 2001, terrorist attacks. Nor has it said whether Defense Secretary Leon E. Panetta or Gen. Martin E. Dempsey, the chairman of the Joint Chiefs of Staff, gave any thought to moving forces in the region as a precaution.

The unclassified version of the Benghazi report concluded that “there simply was not enough time given the speed of the attacks for armed U.S. military assets to have made a difference.” But the report did not address whether it would have been prudent to station quick-reaction forces in the region or whether the United States would have been in a position to quickly respond militarily had Ambassador Stevens been kidnapped and the crisis had dragged on, as was initially feared.

The United States military’s best-trained team to extract diplomats under fire — Delta Force commandos — was half a world away, in Fort Bragg, N.C. “What this report shows is that we need a fundamental rethink of the problem,” said one senior Pentagon official who has spent considerable time examining the issue of protecting American diplomats since the attack in September. “It’s not the military’s job to protect diplomats; it’s the host government’s. But in the absence of a real government, we never asked the question, ‘So how do we do this?’ ”

But as the military budget declines, some ranking officers are wary about taking on new commitments, even ones that involve protecting Americans.

“It is not reasonable nor feasible to tether U.S. forces at the ready to respond to protect every high-risk post in the world,” Mike Mullen, the retired admiral and former chairman of the Joint Chiefs of Staff, who served as vice chairman of the independent review, said Wednesday.

David E. Sanger contributed reporting.

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Boehner Plan Addresses Taxes but Delays Fight Over Spending Cuts

Brendan Hoffman for The New York Times

Speaker John A. Boehner, leaving a news conference Tuesday, proposes allowing tax rates to rise only on incomes over $1 million.

WASHINGTON — House Republican leaders struggled on Tuesday night to rally their colleagues around a backup measure to ease the sting of a looming fiscal crisis by allowing tax rates to rise only on incomes over $1 million.

The plan would leave in place across-the-board spending cuts to military and domestic programs that Republicans have been warning could have dire consequences, especially to national defense.

Speaker John A. Boehner unveiled what he dubbed “Plan B” less than 24 hours after President Obama offered a more comprehensive deal that would raise tax rates on incomes over $400,000 and, over 10 years, produce $1.2 trillion in tax increases and cut $930 billion in spending.

Mr. Boehner pledged to continue negotiating on a broad deficit-reduction deal but called the president’s plan unbalanced and insufficient.

“What we’ve offered meets the definition of a balanced approach, but the president is not there yet,” Mr. Boehner said Tuesday.

The Boehner proposal was intended to raise the pressure on Democrats to compromise further still by embracing a tax increase on millionaires first pushed by Senator Charles E. Schumer, Democrat of New York, and Representative Nancy Pelosi of California, the House Democratic leader.

Confronted with her past support for raising income taxes only on millionaires, Ms. Pelosi said that effort had merely been “a plan to smoke out” Republicans.

But a protracted meeting of the House Republican Conference on Tuesday night made it clear that passage of Mr. Boehner’s proposal would be difficult. Representative Howard P. McKeon of California, the chairman of the House Armed Services Committee, said he was not sure he could support a bill that would allow $500 billion in military cuts over the next 10 years and indicated that other Republicans on his committee shared his concern.

Representative John Fleming, a conservative Republican from Louisiana, dismissed the speaker’s plan as a pointless “messaging exercise.”

“Why go on record raising taxes on anybody if it won’t cut spending and won’t even become law?” he asked. “I haven’t found a way of supporting that.”

Ms. Pelosi was leaning hard on House Democrats to stay united in their opposition. If she succeeds, the speaker could afford about only 18 Republican defections, fewer than he has had on any major fiscal vote since Republicans took control two years ago.

Defense Secretary Leon E. Panetta was unsparing on Tuesday in his criticism of lawmakers resisting a deal to stop the military cuts.

“It is unacceptable to me that men and women who put their lives on the line in distant lands have to worry about whether those here in Washington can effectively support them,” Mr. Panetta said in a speech at the National Press Club. “We’re down to the wire now. In these next few days, Congress needs to make the right decisions to avoid the fiscal disaster that awaits us.”

Senator Rob Portman of Ohio, an influential Republican, said the Pentagon cuts would damage not only military readiness but also the fragile economy.

House Republican leaders on Tuesday night sought to assess whether the speaker’s proposal could be brought to the House floor on Thursday. Under that plan, the House would take up take up tax legislation and consider two amendments. The first would mirror a Senate-passed bill to extend the expiring Bush-era tax cuts for incomes below $250,000. That would be expected to fail, as a show to the president that his initial offer cannot pass.

A second amendment would raise that threshold to incomes below $1 million. The House may also vote on some middle ground, like the president’s $400,000.

Mr. Boehner told House Republicans that he would also like the bill to include provisions to prevent the existing alternative minimum tax from expanding to impact more of the middle class and to extend existing low tax rates on inherited estates.

But he said the bill would not cancel across-the-board spending cuts — known as sequestration — that are scheduled to total $110 billion in 2013 and more than $1 trillion over 10 years.

Republicans would resume the fight for broad spending cuts, especially to entitlement programs like Medicare, in late January or February, when the government will face raising its borrowing limit and when, many Republicans believe, they will have much more leverage than they do now.

The White House came out strongly against the speaker’s plan. The White House press secretary, Jay Carney, said that it could not pass the Senate and “therefore will not protect middle-class families” from large tax increases schedule to begin on Jan. 1.

Jennifer Steinhauer and Thom Shanker contributed reporting.

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Attackers in Pakistan Kill Anti-Polio Workers

Rizwan Tabassum/Agence France-Presse — Getty Images

A Pakistani mother mourned her daughter, who was killed on Tuesday in an attack on health workers participating in a drive to eradicate polio from Pakistan.

ISLAMABAD, Pakistan — Gunmen shot dead five female health workers who were immunizing children against polio on Tuesday, causing the Pakistani government to suspend vaccinations in two cities and dealing a fresh setback to an eradication campaign dogged by Taliban resistance in a country that is one of the disease’s last global strongholds.

“It is a blow, no doubt,” said Shahnaz Wazir Ali, an adviser on polio to Prime Minister Raja Pervez Ashraf. “Never before have female health workers been targeted like this in Pakistan. Clearly there will have to be more and better arrangements for security.”

No group claimed responsibility for the attacks, but most suspicion focused on the Pakistani Taliban, which has previously blocked polio vaccinators and complained that the United States is using the program as a cover for espionage.

The killings were a serious reversal for the multibillion-dollar global polio immunization effort, which over the past quarter century has reduced the number of endemic countries from 120 to just three: Pakistan, Afghanistan and Nigeria.

Nonetheless, United Nations officials insisted that the drive would be revived after a period for investigation and regrouping, as it had been after previous attacks on vaccinators here, in Afghanistan and elsewhere.

Pakistan has made solid gains against polio, with 56 new recorded cases of the diseases in 2012, compared with 192 at the same point last year, according to the government. Worldwide, cases of death and paralysis from polio have been reduced to less than 1,000 last year, from 350,000 worldwide in 1988.

But the campaign here has been deeply shaken by Taliban threats and intimidation, though several officials said Tuesday that they had never seen such a focused and deadly attack before.

Insurgents have long been suspicious of polio vaccinators, seeing them as potential spies. But that greatly intensified after the C.I.A. used a vaccination team headed by a local doctor, Shakil Afridi, to visit Osama bin Laden’s compound in Abbottabad, reportedly in an attempt to obtain DNA proof that the Bin Laden family was there before an American commando raid on it in May 2011.

In North Waziristan, one prominent warlord has banned polio vaccinations until the United States ceases drone strikes in the area.

Most new infections in Pakistan occur in the tribal belt and adjoining Khyber-Pakhtunkhwa Province — some of the most remote areas of the country, and also those with the strongest militant presence. People fleeing fighting in those areas have also spread the disease to Karachi, the country’s largest city, where the disease has been making a worrisome comeback in recent years.

After Tuesday’s attacks, witnesses described violence that was both disciplined and well coordinated. Five attacks occurred within an hour in different Karachi neighborhoods. In several cases, the killers traveled in pairs on motorcycle, opening fire on female health workers as they administered polio drops or moved between houses in crowded neighborhoods.

Of the five victims, three were teenagers, and some had been shot in the head, a senior government official said. Two male health workers were also wounded by gunfire; early reports incorrectly stated that one of them had died, the official said.

In Peshawar, the capital of Khyber-Pakhtunkhwa Province, gunmen opened fire on two sisters participating in the polio vaccination program, killing one of them. It was unclear whether that shooting was directly linked to the Karachi attacks.

In remote parts of the northwest, the Taliban threat is exacerbated by the government’s crumbling writ. In Bannu, on the edge of the tribal belt, one polio worker, Noor Khan, said he quit work on Tuesday once news of the attacks in Karachi and Peshawar filtered in.

“We were told to stop immediately,” he said by phone.

Still, the Pakistani government has engaged considerable political and financial capital in fighting polio. President Asif Ali Zardari and his daughter Aseefa have been at the forefront of immunization drives. With the help of international donors, including the Bill and Melinda Gates Foundation, they have mounted a huge vaccination campaign aimed at up to 35 million children younger than 5, usually in three-day bursts that can involve 225,000 health workers.

The plan seeks to have every child in Pakistan immunized at least four times per year, although in the hardest-hit areas one child could be reached as many as 12 times in a year.

Declan Walsh reported from Islamabad, and Donald G. McNeil Jr. from New York. Salman Masood contributed reporting from Islamabad, and Zia ur-Rehman from Karachi, Pakistan.

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Attackers in Pakistan Kill Anti-Polio Workers

Rizwan Tabassum/Agence France-Presse — Getty Images

A Pakistani mother mourned her daughter, who was killed on Tuesday in an attack on health workers participating in a drive to eradicate polio from Pakistan.

ISLAMABAD, Pakistan — Gunmen shot dead five female health workers who were immunizing children against polio on Tuesday, causing the Pakistani government to suspend vaccinations in two cities and dealing a fresh setback to an eradication campaign dogged by Taliban resistance in a country that is one of the disease’s last global strongholds.

“It is a blow, no doubt,” said Shahnaz Wazir Ali, an adviser on polio to Prime Minister Raja Pervez Ashraf. “Never before have female health workers been targeted like this in Pakistan. Clearly there will have to be more and better arrangements for security.”

No group claimed responsibility for the attacks, but most suspicion focused on the Pakistani Taliban, which has previously blocked polio vaccinators and complained that the United States is using the program as a cover for espionage.

The killings were a serious reversal for the multibillion-dollar global polio immunization effort, which over the past quarter century has reduced the number of endemic countries from 120 to just three: Pakistan, Afghanistan and Nigeria.

Nonetheless, United Nations officials insisted that the drive would be revived after a period for investigation and regrouping, as it had been after previous attacks on vaccinators here, in Afghanistan and elsewhere.

Pakistan has made solid gains against polio, with 56 new recorded cases of the diseases in 2012, compared with 192 at the same point last year, according to the government. Worldwide, cases of death and paralysis from polio have been reduced to less than 1,000 last year, from 350,000 worldwide in 1988.

But the campaign here has been deeply shaken by Taliban threats and intimidation, though several officials said Tuesday that they had never seen such a focused and deadly attack before.

Insurgents have long been suspicious of polio vaccinators, seeing them as potential spies. But that greatly intensified after the C.I.A. used a vaccination team headed by a local doctor, Shakil Afridi, to visit Osama bin Laden’s compound in Abbottabad, reportedly in an attempt to obtain DNA proof that the Bin Laden family was there before an American commando raid on it in May 2011.

In North Waziristan, one prominent warlord has banned polio vaccinations until the United States ceases drone strikes in the area.

Most new infections in Pakistan occur in the tribal belt and adjoining Khyber-Pakhtunkhwa Province — some of the most remote areas of the country, and also those with the strongest militant presence. People fleeing fighting in those areas have also spread the disease to Karachi, the country’s largest city, where the disease has been making a worrisome comeback in recent years.

After Tuesday’s attacks, witnesses described violence that was both disciplined and well coordinated. Five attacks occurred within an hour in different Karachi neighborhoods. In several cases, the killers traveled in pairs on motorcycle, opening fire on female health workers as they administered polio drops or moved between houses in crowded neighborhoods.

Of the five victims, three were teenagers, and some had been shot in the head, a senior government official said. Two male health workers were also wounded by gunfire; early reports incorrectly stated that one of them had died, the official said.

In Peshawar, the capital of Khyber-Pakhtunkhwa Province, gunmen opened fire on two sisters participating in the polio vaccination program, killing one of them. It was unclear whether that shooting was directly linked to the Karachi attacks.

In remote parts of the northwest, the Taliban threat is exacerbated by the government’s crumbling writ. In Bannu, on the edge of the tribal belt, one polio worker, Noor Khan, said he quit work on Tuesday once news of the attacks in Karachi and Peshawar filtered in.

“We were told to stop immediately,” he said by phone.

Still, the Pakistani government has engaged considerable political and financial capital in fighting polio. President Asif Ali Zardari and his daughter Aseefa have been at the forefront of immunization drives. With the help of international donors, including the Bill and Melinda Gates Foundation, they have mounted a huge vaccination campaign aimed at up to 35 million children younger than 5, usually in three-day bursts that can involve 225,000 health workers.

The plan seeks to have every child in Pakistan immunized at least four times per year, although in the hardest-hit areas one child could be reached as many as 12 times in a year.

Declan Walsh reported from Islamabad, and Donald G. McNeil Jr. from New York. Salman Masood contributed reporting from Islamabad, and Zia ur-Rehman from Karachi, Pakistan.

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U.S. Is Expected to Extend Google Antitrust Inquiry

WASHINGTON — The Federal Trade Commission is unlikely to finish until January its investigation into whether Google abused its power in the search market, people briefed on the investigation said on Tuesday.

The agency’s chairman, Jon Leibowitz, has consistently said that the commission was aiming to finish its inquiry by the end of 2012, and all signs have been pointing to an imminent settlement, including reports of a Google proposal to avoid formal punishment by promising to change some of its practices.

Two people who have been briefed on the investigation said that some commissioners had asked for more time to consider possible penalties after recent reports portrayed Google as having persuaded the F.T.C. to give the company little more than a slap on the wrist.

For almost two years, the F.T.C. has been studying whether Google’s dominant search engine intentionally produces search results that favor its own commerce and other services. Companies with competing search engines as well as commercial sites that specialize in airline ticket information or shopping have complained that Google has stifled competition by its actions.

Those competitors have reacted with outrage over the last week to reports that the F.T.C. planned not to file charges of antitrust violations or unfair competition. The commission was prepared to accept Google’s written assurances that it would alter some practices related to search, according to the reports. The F.T.C. could enforce compliance with such a written assurance.

Google’s competitors, which have been urging regulators to take action, stepped up their protests after the recent reports. That outrage has apparently reverberated in the halls of the commission, where displeasure has grown at the portrayals of the commission as having been cowed by the technology giant.

The people briefed on the inquiry said that the F.T.C. would most likely conclude its effort in early to mid-January.

The commission is also continuing its look at whether Google abused its control of certain patents concerning mobile phone technology.

Adam Kovacevich, a Google spokesman, said the company would “continue to work cooperatively with the Federal Trade Commission and are happy to answer any questions they may have.” An F.T.C. representative declined to comment.

Google will also apparently be extending into 2013 a parallel three-year inquiry in Europe, but with hope of avoiding a big fine or a finding of wrongdoing.

After meeting with Eric E. Schmidt, Google’s executive chairman, the European Union’s competition commissioner, Joaquín Almunia, said in a statement Tuesday that “we have substantially reduced our differences.”

“I now expect Google to come forward with a detailed commitment text in January 2013,” Mr. Almunia said.

Mr. Almunia is also focusing on whether Google’s search engine thwarted competition by favoring the company’s services in presenting results of search queries.

He said Tuesday that in their discussion, the company indicated it would change “the way in which Google’s vertical search services are displayed within general search results as compared to services of competitors.”

The other areas in which Mr. Almunia said he expected to reach a deal included how Google uses and displays content from other companies in its search tool, and the restrictions that Google places on advertising and advertisers. Any concessions Google offered would be tested in the marketplace to assess their acceptability to other companies, before becoming binding, Mr. Almunia said.

If there is a settlement, Google will avoid a possible fine of as much as 10 percent of its annual global revenue, about $37.9 billion last year. It would also avoid a guilty finding that could restrict its activities in Europe. “We continue to work cooperatively with the commission,” Al Verney, a Google spokesman in Brussels, said.

Exactly what concessions on search services Mr. Almunia can wring from Google remained an open question Tuesday, though antitrust specialists agreed that he had more leverage than his American counterparts.

While Google is the dominant search engine in the United States, it holds even greater sway in Europe, accounting for more than 90 percent of searches in a number of large markets. That is one factor giving the Europeans greater leverage in trying to set rules on how Google ranks competing services.

Another factor is European antitrust law, which has long given competitors more protection than United States law provides.

Antitrust law in Europe, and the commission’s approach to it, has shifted in recent years, raising the hurdles for complainants against dominant companies, said Emanuela Lecchi, an antitrust lawyer in London with Watson, Farley & Williams.

Even so, Ms. Lecchi said, Europe still offers rivals greater protection. Compared with the United States, European regulators “are more inclined to try and make sure there is always a choice of players on markets, and that’s something that might allow Google’s rivals to make more progress at the end of the day,” she said.

Edward Wyatt reported from Washington and James Kanter from Brussels. Steve Lohr contributed reporting from New York.

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Thai Buddhist Monks Struggle to Stay Relevant

Giulio Di Sturco for the International Herald Tribune

Young monks rehearsed an evening candlelight ceremony at Wat Chedi Luang in Chiang Mai, Thailand. More Photos »

BAAN PA CHI, Thailand — The monks of this northern Thai village no longer perform one of the defining rituals of Buddhism, the early-morning walk through the community to collect food. Instead, the temple’s abbot dials a local restaurant and has takeout delivered.

“Most of the time, I stay inside,” said the abbot, Phra Nipan Marawichayo, who is one of only two monks living in what was once a thriving temple. “Values have changed with time.”

The gilded roofs of Buddhist temples are as much a part of Thailand’s landscape as rice paddies and palm trees. The temples were once the heart of village life, serving as meeting places, guesthouses and community centers. But many have become little more than ornaments of the past, marginalized by a shortage of monks and an increasingly secular society.

“Consumerism is now the Thai religion,” said Phra Paisan Visalo, one of the country’s most respected monks. “In the past, people went to temple on every holy day. Now, they go to shopping malls.”

The meditative lifestyle of the monkhood offers little allure to the iPhone generation. The number of monks and novices relative to the population has fallen by more than half over the last three decades. There are five monks and novices for every 1,000 people today, compared with 11 in 1980, when governments began keeping nationwide records.

Although it is still relatively rare for temples to close, many districts are so short on monks that abbots here in northern Thailand recruit across the border from impoverished Myanmar, where monasteries are overflowing with novices.

Many societies have witnessed a gradual shift from the sacred toward the profane as they have modernized. What is striking in Thailand is the compressed time frame, a vertiginous pace of change brought on by the country’s rapid economic rise. In a relatively short time, the local Buddhist monk has gone from being a moral authority, teacher and community leader fulfilling important spiritual and secular roles to someone whose job is often limited to presiding over periodic ceremonies.

Phra Anil Sakya, the assistant secretary to the Supreme Patriarch of Thailand, the country’s governing body of Buddhism, said that Thai Buddhism needed “new packaging” to match the country’s fast-paced lifestyle. (Phra is the honorific title for monks in Thailand.)

“People today love high-speed things,” he said in an interview. “We didn’t have instant noodles in the past, but now people love them. For the sake of presentation, we have to change the way we teach Buddhism and make it easy and digestible like instant noodles.”

He says Buddhist leaders should make Buddhism more relevant by emphasizing the importance of meditation as a salve for stressful urban lifestyles. The teaching of Buddhism, or dharma, does not need to be tethered to the temple, he said.

“You can get dharma in department stores, or even over the Internet,” he said.

But Phra Paisan is markedly more pessimistic about what is sometimes called “fast-food Buddhism.” He is encouraged by the embrace of meditation among many affluent Thais and the healthy sales of Buddhist books, but he sees basic incompatibilities between modern life and Buddhism.

His life is a portrait of traditional Buddhist asceticism. He lives in a remote part of central Thailand in a stilt house on a lake, connected to the shore by a rickety wooden bridge. He has no furniture, sleeps on the floor and is surrounded by books. He requested that a reporter meet him for an interview at 6 a.m., before he led his fellow monks in prayer, when mist on the lake was still evaporating.

Monks are suffering a decline in “quantity and quality,” he said, partly because young people are drawn to the riches and fast-paced life of the cities. The monastic education of young boys, once widespread in rural areas, has been almost entirely replaced by the secular education provided by the state.

Poypiti Amatatham contributed reporting from Bangkok.

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