The Next War: In Federal Budget Cutting, F-35 Fighter Jet Is at Risk

Luke Sharrett for The New York Times

Vice Adm. David Venlet was named to lead the Joint Strike Fighter program in 2010 after problems had left it behind schedule and over budget.

LEXINGTON PARK, Md. — The Marine version of the F-35 Joint Strike Fighter, already more than a decade in the making, was facing a crucial question: Could the jet, which can soar well past the speed of sound, land at sea like a helicopter?

Luke Sharrett for The New York Times

An F-35B, the Marine Corps version of the Joint Strike Fighter.

On an October day last year, with Lt. Col. Fred Schenk at the controls, the plane glided toward a ship off the Atlantic coast and then, its engine rotating straight down, descended gently to the deck at seven feet a second.

There were cheers from the ship’s crew members, who “were all shaking my hands and smiling,” Colonel Schenk recalled.

The smooth landing helped save that model and breathed new life into the huge F-35 program, the most expensive weapons system in military history. But while Pentagon officials now say that the program is making progress, it begins its 12th year in development years behind schedule, troubled with technological flaws and facing concerns about its relatively short flight range as possible threats grow from Asia.

With a record price tag — potentially in the hundreds of billions of dollars — the jet is likely to become a target for budget cutters. Reining in military spending is on the table as President Obama and Republican leaders in Congress look for ways to avert a fiscal crisis. But no matter what kind of deal is reached in the next few weeks, military analysts expect the Pentagon budget to decline in the next decade as the war in Afghanistan ends and the military is required to do its part to reduce the federal debt.

Behind the scenes, the Pentagon and the F-35’s main contractor, Lockheed Martin, are engaged in a conflict of their own over the costs. The relationship “is the worst I’ve ever seen, and I’ve been in some bad ones,” Maj. Gen. Christopher Bogdan of the Air Force, a top program official, said in September. “I guarantee you: we will not succeed on this if we do not get past that.”

In a battle that is being fought on other military programs as well, the Pentagon has been pushing Lockheed to cut costs much faster while the company is fighting to hold onto a profit. “Lockheed has seemed to be focused on short-term business goals,” Frank Kendall, the Pentagon’s top weapons buyer, said this month. “And we’d like to see them focus more on execution of the program and successful delivery of the product.”

The F-35 was conceived as the Pentagon’s silver bullet in the sky — a state-of-the art aircraft that could be adapted to three branches of the military, with advances that would easily overcome the defenses of most foes. The radar-evading jets would not only dodge sophisticated antiaircraft missiles, but they would also give pilots a better picture of enemy threats while enabling allies, who want the planes, too, to fight more closely with American forces.

But the ambitious aircraft instead illustrates how the Pentagon can let huge and complex programs veer out of control and then have a hard time reining them in. The program nearly doubled in cost as Lockheed and the military’s own bureaucracy failed to deliver on the most basic promise of a three-in-one jet that would save taxpayers money and be served up speedily.

Lockheed has delivered 41 planes so far for testing and initial training, and Pentagon leaders are slowing purchases of the F-35 to fix the latest technical problems and reduce the immediate costs. A helmet for pilots that projects targeting data onto its visor is too jittery to count on. The tail-hook on the Navy jet has had trouble catching the arresting cable, meaning that version cannot yet land on carriers. And writing and testing the millions of lines of software needed by the jets is so daunting that General Bogdan said, “It scares the heck out of me.”

With all the delays — full production is not expected until 2019 — the military has spent billions to extend the lives of older fighters and buy more of them to fill the gap. At the same time, the cost to build each F-35 has risen to an average of $137 million from $69 million in 2001.

The jets would cost taxpayers $396 billion, including research and development, if the Pentagon sticks to its plan to build 2,443 by the late 2030s. That would be nearly four times as much as any other weapons system and two-thirds of the $589 billion the United States has spent on the war in Afghanistan. The military is also desperately trying to figure out how to reduce the long-term costs of operating the planes, now projected at $1.1 trillion.

“The plane is unaffordable,” said Winslow T. Wheeler, an analyst at the Project on Government Oversight, a nonprofit group in Washington.

Todd Harrison, an analyst at the Center for Strategic and Budgetary Assessments, a research group in Washington, said Pentagon officials had little choice but to push ahead, especially after already spending $65 billion on the fighter. “It is simultaneously too big to fail and too big to succeed,” he said. “The bottom line here is that they’ve crammed too much into the program. They were asking one fighter to do three different jobs, and they basically ended up with three different fighters.”

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Most L.A. County youths held for prostitution come from foster care

A majority of juveniles arrested on prostitution charges in Los Angeles County come from the county's foster care system, and, in some cases, pimps use underage sex workers to recruit fellow group home residents, county officials said.

Until now, foster youth caught in the sex trade have largely been the responsibility of the county Probation Department.

The Los Angeles County Board of Supervisors voted Tuesday to launch a multiagency task force to address the ongoing issue of sex trafficking involving youth in the foster care system. The move was spurred in part by this month's passage of an anti-sex-trafficking ballot measure, which county officials said will shift much of the responsibility for juvenile prostitutes from the criminal justice system to the foster care system.

Of the 174 juveniles arrested on prostitution-related charges in Los Angeles County in 2010, 59% were in the foster care system, according to Probation Department statistics. The department has launched initiatives to address the issue of sex trafficking, including running prevention workshops in juvenile halls.

But underage sex workers may no longer fall under the Probation Department's jurisdiction.

Proposition 35, which imposes tougher penalties on pimps, also includes language that decriminalizes prostitution for minors caught up in the trade — although there is debate about the effects of that change. But officials fear that greater numbers of young people involved in prostitution will become the responsibility of the county Department of Children and Family Services. Department director Philip Browning said his agency is "really unprepared at this point" to handle such an influx.

Browning and others said the department is not empowered to keep children in group homes and other placements against their will, and can't prevent them from running away. Emilio I. Mendoza, a children services' program manager, said many young sex workers fear they will be punished by their pimps if they don't leave foster homes when they have an opportunity do so.

"These kids see themselves as having no way out unless they're in a secure setting," he said.

Probation camps and juvenile halls provide that security. But advocates say the criminal justice system is not the proper setting for young victims of abuse and coercion.

"They should not be treated as the criminal. They are a victim. The pimps should be treated as the criminal and given long prison sentences," said county Supervisor Michael D. Antonovich, who proposed the task force. Antonovich said during Tuesday's meeting that the trafficking issue came to the county board's attention early this year, when they learned that young girls were serving as prostitutes around Staples Center after Lakers games.

The task force includes county children's services, probation and mental health workers as well as law enforcement officials. It will examine the scope of the foster youth prostitution problem and report back with recommendations in six months.

But Lois Lee, founder of a Los Angeles-based, 24-bed shelter for child sex workers called Children of the Night, said she is skeptical of the claim that kids in the foster system are particularly vulnerable to sex trafficking. The majority of the shelter's clients were under the legal guardianship of their parents when they arrived, according to the organization's 2011 annual report.

"They're kids that [the Department of Children and Family Services] left behind in the first place," Lee said.

abby.sewell@latimes.com

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Ex-Elmo puppeteer faces new sex-with-minor allegation

NEW YORK (Reuters) – The puppeteer formerly behind the “Sesame Street” character Elmo faces a new accusation of having sex with an underage boy, a week after a similar allegation prompted him to resign from the iconic public television children’s program.

In a lawsuit filed Tuesday in U.S. District Court in Manhattan, a man identified only as John alleges Kevin Clash engaged in oral sex and other sex acts with him when John was 16 years old. The suit seeks at least $ 75,000 in damages.

The suit alleges the incident occurred in either 2000 or 2001 when John, who is from Florida, visited New York for modeling opportunities. John came to know Clash, then 40, through a telephone chat line for gays on which Clash claimed to be a 30-year-old named Craig, according to the suit.

John returned to New York when he turned 18, and he and Clash renewed the relationship, the lawsuit said.

“Mr. Clash believes the lawsuit has no merit,” Clash’s publicist, Risa B. Heller, said in an emailed statement.

It is the latest charge levied against Clash, now 52, who resigned on November 20 from Sesame Workshop, the company behind “Sesame Street,” after nearly 30 years on the show.

His resignation came the same day Cecil Singleton filed a claim seeking more than $ 5 million in damages from Clash. Singleton claims he met the then-32-year-old puppeteer in 1993 in a gay chat room when he was 15.

It added that on numerous occasions over a period of years Clash engaged in sexual activity with Singleton.

The newest allegation comes about two weeks after another man recanted his claims that Clash had sex with him when he was 16 years old. The man later said the relationship was consensual.

Clash had denied the allegations and acknowledged a past relationship with his first accuser. He added the pair were both consenting adults at the time.

The Elmo character debuted on “Sesame Street” in 1979, 10 years after the show premiered and introduced the now-iconic characters Big Bird, Bert and Ernie, Oscar the Grouch and Cookie Monster, among others, to American children.

While Clash was the third performer to animate the child-like shaggy red monster, Sesame Workshop credits him with turning Elmo into the international sensation he became.

(Reporting by Dan Burns; Editing by Paul Thomasch and Cynthia Osterman)

Celebrity News Headlines – Yahoo! News

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Amid Hurricane Sandy, a Race to Get a Liver Transplant

It was the best possible news, at the worst possible time.

The phone call from the hospital brought the message that Dolores and Vin Dreeland had long hoped for, ever since their daughter Natalia, 4, had been put on the waiting list for a liver transplant. The time had come.

They bundled her into the car for the 50-mile trip from their home in Long Valley, N.J., to NewYork-Presbyterian Morgan Stanley Children’s Hospital in Manhattan. But it soon seemed that this chance to save Natalia’s life might be just out of reach.

The date was Sunday, Oct. 28, and Hurricane Sandy, the worst storm to hit the East Coast in decades, was bearing down on New York. Airports and bridges would soon close, but the donated organ was in Nevada, five hours away. The time window in which a plane carrying the liver would be able to land in the region was rapidly closing.

In a hospital room, Natalia watched cartoons. Her parents watched the clock, and the weather. “Our anxiety was through the roof,” Mrs. Dreeland said. “It just made your stomach into knots.”

The Dreelands, who are in their 60s, became Natalia’s foster parents in 2008 when she was 7 months old, and adopted her just before she turned 2. They have another adopted daughter, Dorothy Jane, who is 17.

Natalia is a “smart little cookie” who loves school and dressing up Alice, her favorite doll, her mother said. At age 3, Natalia used the word “discombobulated” correctly, Mr. Dreeland said.

Natalia’s health problems date back several years. Her gallbladder was taken out in 2010, and about half her liver was removed in 2011. The underlying problem was a rare disease, Langerhans cell histiocytosis. It causes a tremendous overgrowth of a type of cell in the immune system and can damage organs. Drugs can sometimes keep it in check, but they did not work for Natalia.

In her case, the disease struck the bile ducts, which led to progressive liver damage. “She would have eventually gone into liver failure,” said Dr. Nadia Ovchinsky, a pediatric liver transplant specialist at NewYork-Presbyterian. “And she demonstrated some signs of early liver failure.”

The only hope was a transplant.

Dr. Tomoaki Kato, Natalia’s surgeon, knew that the liver in Nevada was a perfect match for Natalia in the two criteria that matter most: blood type and size. The deceased donor was 2 years old, and though Natalia is nearly 5, she is small for her age. Scar tissue from her previous operations would have made it very difficult to fit a larger organ into her abdomen.

Though Dr. Kato had considered transplanting part of an adult liver into Natalia, a complete organ from a child would be far better for her. But healthy organs from small children do not often become available, Dr. Kato said. This was a rare opportunity, and he was determined to seize it.

But as the day wore on, the odds for Natalia grew slimmer. The operation in Nevada to remove the liver was delayed several times.

At many hospitals, surgery to remove donor organs is done at the end of the day, after all regularly scheduled operations. The Nevada hospital had a busy surgical schedule that day, made worse by a trauma case that took priority.

At the hospital in New York, Tod Brown, an organ procurement coordinator, had alerted a charter air carrier that a flight from Nevada might be needed. That company in turn contacted West Coast carriers to pick up the donated liver and fly it to New York.

Initially, two carriers agreed, but then backed out. Several other charter companies also declined.

Mr. Brown told Dr. Kato that they might have to decline the organ. Dr. Kato, soft-spoken but relentless, said, “Find somebody who can fly.”

Dr. Kato used to work in Miami, where pilots found ways to bypass hurricanes to deliver organs. Even during Hurricane Katrina, his hospital performed transplants.

“I asked the transplant coordinators to just keep pushing,” he said.

Mr. Brown said, “Dr. Kato knew he was going to get that organ, one way or another.”

As the trajectory of the storm became clearer, one of the West Coast charter companies agreed to attempt the flight. The plan was to land at the airport in Teterboro, N.J. The backup was Newark airport, and the second backup was Albany, from where an ambulance would finish the trip.

The timing was critical: organs deteriorate outside the body, and ideally a liver should be transplanted within 12 hours of being removed.

Early Monday, as the storm whirled offshore, the plane landed at Teterboro. Soon a nurse rushed to tell the Dreelands that she had just seen an ambulance with lights and sirens screech up to the hospital. Someone had jumped out carrying a container.

At about 5 a.m., the couple kissed Natalia and saw her wheeled off to the operating room.

Three weeks later, she is back home, on the mend. The complicated regimen of drugs that transplant patients need is tough on a child, but she is getting through it, her father said.

Recently, Mr. Dreeland said, he found himself weeping uncontrollably during a church service for the family of the child who had died. “Their child gave my child life,” he said.

Though only time will tell, because the histiocytosis appeared limited to Natalia’s bile ducts and had not affected other organs, her doctors say there is a good chance that the transplant has cured her.

This article has been revised to reflect the following correction:

Correction: November 28, 2012

Because of an editing error, a picture caption with an article on Tuesday about a girl who received a liver transplant during Hurricane Sandy misspelled the surname of the girl’s family. As the article correctly noted, it is Dreeland, not Vreeland.

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Facebook Gifts Urges Users to Shop While They Share

SAN FRANCISCO — Facebook is already privy to its users’ e-mail addresses, wedding pictures and political beliefs. Now the company is nudging them to share a bit more: credit card numbers and offline addresses.

James Best Jr./The New York Times

Facebook Gifts is a service that prompts users to buy things for friends on the social network.

Sharing Even More

What do you think about Facebook’s plan to have users buy gifts for their friends through the site using their credit cards?

A screenshot of Facebook Gifts.

The nudge comes from a new Facebook service called Gifts. It allows Facebook users — only in the United States for now — to buy presents for their friends on the social network. On offer are items as varied as spices from Dean & DeLuca, pajamas from BabyGap and subscriptions to Hulu Plus, the video service. This week Facebook added iTunes gift cards.

The gift service is part of an aggressive moneymaking push aimed at pleasing Facebook’s investors after the company’s dismal stock market debut. Facebook has stepped up mobile advertising and is starting to customize the marketing messages it shows to users based on their Web browsing outside Facebook.

Those efforts seem to have brought some relief to Wall Street. Analysts issued more bullish projections for the company in recent days, and the stock was up 49 percent from its lowest point, closing Tuesday at $26.15, although that is still well below the initial offering price of $38. The share price has been buoyed in part by the fact that a wave of insider lockup periods expired without a flood of shares hitting the market.

To power the Gifts service, Facebook rented a warehouse in South Dakota and created its own software to track inventory and shipping. It will not say how much it earns from each purchase made through Gifts, though merchants that have a similar arrangement with Amazon.com give it a roughly 15 percent cut of sales.

If it catches on, the service would give Facebook a toehold in the more than $200 billion e-commerce market. Much more important, it would let the company accumulate a new stream of valuable personal data and use it to refine targeted advertisements, its bread and butter. The company said it did not now use data collected through Gifts for advertising purposes, but could not rule it out in the future.

“The hard part for Facebook was aggregating a billion users. Now it’s more about how to monetize those users without scaring them away,” said Colin Sebastian, an analyst with Robert W. Baird.

He added: “Gifts should also contribute more to Facebook’s treasure trove of user data, which has the benefit of a virtuous cycle, driving more personalization of the site, leading to better and more targeted ads, which improves overall monetization.”

Facebook already collects credit card information from users who play social games on its site. But they are a limited constituency, and a wider audience may be persuaded to buy a gift when Facebook reminds them that a friend is expecting a baby or a cousin is approaching her 40th birthday.

The Gifts service, which grew out of Facebook’s acquisition of a mobile application called Karma, was introduced in September and expanded earlier this month on the eve of the holiday shopping season.

Magnolia Bakery, based in New York, was among Facebook’s early partners for Gifts. Its vice president for public relations, Sara Gramling, said the company had sold roughly 200 packages of treats since then. She counted it as a marketing success. The bakery, which gained fame thanks to “Sex and the City,” had only recently begun shipping its goods. “It was a great opportunity to expand our network,” she said.

Magnolia Bakery isn’t exactly catering to the masses. A half-dozen cupcakes cost $35, plus about $12 for shipping. Facebook, Ms. Gramling said, takes care of the billing. The bakery is eyeing Facebook’s global reach, too, as it opens outlets internationally, especially in the Middle East.

One of the appeals of Facebook Gifts is the ease of making a purchase. Facebook users are nudged to buy a gift (a gift-box icon pops up) for Facebook friends on their birthdays. They are offered a vast menu to choose from: beer glasses, cake pops, quilts, marshmallows, magazine subscriptions and donations to charity. They are asked to choose a greeting card. Then they are asked for credit card details. Facebook says it stores that credit card information, unless users remove it after making a purchase.

Facebook has declined to say how many users have bought gifts, only that among those who have, the average purchase is $25.

David Streitfeld contributed reporting.

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Egypt president meets judges, fails to 'contain crisis'

CAIRO — President Mohamed Morsi suggested Monday that he would scale back broad powers he assumed last week but failed to appease Egypt's judiciary, which would still lack oversight of some institutions including the Islamist-led assembly drafting a new constitution.

Morsi and senior judges met for nearly five hours to discuss differences resulting from the president's declaration that his office was free from judicial review. Morsi told judges that the decree was meant to be temporary, and mainly aimed at shielding the long-troubled constitutional assembly from any judicial attempt to disband it.

Presidential spokesman Yasser Ali said after the meeting that Morsi's decree was not designed to "infringe" on the judiciary, suggesting not all of the president's actions would be immune from court review. The Supreme Judicial Council on Saturday condemned Morsi's expanded powers as an "unprecedented attack" on the courts. And Monday's talks did not seem to soften the sentiment of some council members.

"Our meeting with the president has failed to contain the crisis," Abdelrahman Bahloul, a member of the judicial council, told the newspaper Al Masry al Youm. "The statement issued by the presidency is frail and does not represent the members of the council."

The Judges Club, a separate legal organization, also was not satisfied that Morsi had scaled back enough of his authority. It called on its members to continue a partial strike in Alexandria and other cities. Ziad Akl, a political analyst, said Morsi's negotiations with the judges were a move to show the public he's not a dictator, "but, in reality, his declaration has not changed."

The talks in the presidential palace did not stop anti-Morsi demonstrations in Tahrir Square on Monday. But in a sign tensions may be easing, the Muslim Brotherhood, which Morsi helped lead until his inauguration in June, announced it was canceling a scheduled demonstration Tuesday to avoid bloodshed and possible clashes with Morsi opponents.

The consequences of the nation's restiveness played out as Morsi and the judges met Monday, with mourners turning out to bury two boys from opposite political sides who were killed in recent clashes: a 16-year-old antigovernment protester reportedly shot with a rubber bullet near Tahrir Square and a 15-year-old struck by a stone when a crowd attacked an office of the Brotherhood's Freedom and Justice Party in the Nile Delta.

"The presidency mourns two of the nation's finest young men," Morsi said in a statement.

But the images of two funerals made it clear that Morsi and the Brotherhood, although still Egypt's dominant political forces, miscalculated the depth of public anger that has bristled since last year's overthrow of longtime autocrat Hosni Mubarak and subsequent government setbacks, including judicial action disbanding the Islamist-led parliament.

Last month, Morsi, who for months has held wide executive and legislative powers, attempted to fire Prosecutor-General Abdel Meguid Mahmoud, only to retreat after a backlash from judges. His most recent decree to hold his office above judicial oversight struck many as another ill-conceived bid to consolidate his authority and advance an Islamist agenda.

Morsi contended that his intent was to prevent Mubarak-era judges from disrupting the country's political transition. Many Egyptians, including opposition figures, are suspicious of the courts, Mahmoud in particular. But Morsi's unilateral decree echoed the strongman tactics of his predecessor.

One of the president's biggest challenges is to protect the assembly drafting the constitution, which will open the way for new parliamentary elections. In June, the Supreme Constitutional Court, made up mostly of Mubarak-appointed judges, dissolved parliament. The court has since been deciding the fate of the Islamist-led assembly, which Morsi feared would also be disbanded.

Activists, liberals, women and non-Muslims have boycotted the assembly, saying that it is too focused on sharia, or Islamic law, which could limit civil rights. Protesters in Tahrir Square said they will continue their demonstrations until Morsi retracts more of his power.

Jaber Nassar, a legal expert quoted on state TV, said Morsi's meeting with the judges showed that he remains adamant on keeping broad authority. He called Morsi's announcement Monday "simply a political statement meant to curb protests against" his decree.

jeffrey.fleishman@latimes.com

Abdellatif is a special correspondent.

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A Google-a-Day Puzzle for Nov. 27

Our good friends at Google run a daily puzzle challenge and asked us to help get them out to the geeky masses. Each day’s puzzle will task your googling skills a little more, leading you to Google mastery. Each morning at 12:01 a.m. Eastern time you’ll see a new puzzle posted here.

SPOILER WARNING:
We leave the comments on so people can work together to find the answer. As such, if you want to figure it out all by yourself, DON’T READ THE COMMENTS!

Also, with the knowledge that because others may publish their answers before you do, if you want to be able to search for information without accidentally seeing the answer somewhere, you can use the Google-a-Day site’s search tool, which will automatically filter out published answers, to give you a spoiler-free experience.

And now, without further ado, we give you…

TODAY’S PUZZLE:

Note: Ad-blocking software may prevent display of the puzzle widget.

Ken is a husband and father from the San Francisco Bay Area, where he works as a civil engineer. He also wrote the NYT bestselling book "Geek Dad: Awesomely Geeky Projects for Dads and Kids to Share."

Read more by Ken Denmead

Follow @fitzwillie and @wiredgeekdad on Twitter.

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Beyonce to direct documentary about herself for HBO

LOS ANGELES (Reuters) – Pop superstar Beyonce is stepping behind the camera to direct a behind-the-scenes documentary about her personal and professional life, U.S. cable channel HBO said on Monday.

The currently untitled film will debut on February 16 and show the Grammy-winning singer’s life in the recording studio, readying for live performances and running her own TV and music production company.

“Everybody knows Beyonce’s music, but few know Beyonce the person,” HBO Programming President Michael Lombardo said in a statement. “Along with electrifying footage of Beyonce on stage, this unique special looks beyond the glamour to reveal a vibrant, vulnerable, unforgettable woman.”

The documentary will also feature moments in the “Crazy in Love” singer’s family life and first-person footage Beyonce captured on her laptop.

Beyonce, 31, who is married to hip hop artist and mogul Jay-Z, will headline the Super Bowl halftime show in New Orleans on February 3.

(Reporting By Eric Kelsey, editing by Jill Serjeant and Andrew Hay)

Movies News Headlines – Yahoo! News

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Letters: Cycle of Birth and Death (1 Letter)

To the Editor:

Re “Amid Cosmic Fatigue, Scarcely a Star Is Born” (Out There, Nov. 20): Though one may bemoan the rapidly declining birthrate of stars, the inescapable fact is that everything ends. People live for about 80 years, but any one of us could die tomorrow. As for our species, a cosmic impact causing mass extinctions like that of the dinosaurs occurs every 100 million years or so, although we may extinguish ourselves long before that through war or by destroying our environment.

Our planet will be incinerated in about 5 billion years when our Sun, in its own death throes, becomes a red giant. And our Milky Way galaxy will collide and merge with Andromeda in 3 to 4 billion years. Even the universe itself will end in either fire or ice, depending on whether its expansion continues forever, causing a “big rip,” or is reversed, resulting in a “big crunch.”

Happy holidays!

Stephen A. Silver

San Francisco

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Puerto Rico Races to Rescue Its Pension Fund

Puerto Rico is fighting to stay afloat in a rising sea of debt.

Its economy is sputtering. Its population is shrinking. Its recent election is disputed. Its public pension fund is perilously low on cash. The American territory has just been through a brutal five-year recession, something not experienced in the United States as a whole since the 1930s.

Desperate to raise cash, Puerto Rican officials have been selling off anything they can: two toll roads and the main airport so far.

To bring in tax revenue, they are trying to lure people out of the underground economy. Coffee shops, hairdressers, even outdoor market stalls are being required to issue printed receipts with every sale. The receipts carry a lottery number, with a chance to win cars or cash, as an incentive to get shoppers to pay the island’s 7 percent sales tax.

Though many of Puerto Rico’s problems are reminiscent of Greece’s — tax noncompliance, a stagnant economy, years of issuing long-term debt to cover short-term payments — investors have had a nearly insatiable appetite for its bonds.

But now their support is dwindling. Some big investors are pruning their holdings. That is beginning to widen the cost of borrowing for Puerto Rico relative to other states and municipalities, which are benefiting from a big decline in borrowing costs. The interest rate its 30-year bonds now pay is about 2.5 percentage points higher than other municipal borrowers’, up from a difference of just 1.5 percentage points at the beginning of 2012, according to Municipal Market Data.

The possibility of a credit downgrade also hangs in the air, something that could lead to more selling.

“There is no specific event looming on the horizon,” said Alan Schankel, a managing director at Janney Capital Markets in Philadelphia. “But it’s a problem of immense magnitude, and it’s very challenging to sit here and see how they work their way out of it.”

Puerto Rico needs to be able to issue bonds at attractive rates to cover its short-term financing needs. Perhaps more important, it has to figure out how to salvage its retirement funds. After shortchanging them for years, it now has the weakest major public pension system in America.

The main fund, which serves about 250,000 government workers, past and present, is only 6 percent funded — a small percentage of what is considered the minimum needed for a marginally healthy pension plan — and could run out of money as soon as 2014. Another fund, for about 80,000 teachers, which is 20 percent funded, will last just a few years longer if nothing is done. Police officers and teachers in Puerto Rico have opted out of Social Security and rely entirely on their pensions.

“For now, I’m not totally shaken about the possibility of the fund going broke,” said Jorge Ramón Román, a 78-year-old retired instructor for the island’s Civil Air Patrol. “But I do fear for the future, when I’ll be an even older person, more infirm and with less of a pension.”

Héctor M. Mayol Kauffman, the executive director of the pension system, said it would be impossible to cut the benefits of people who are already retired, citing court precedent.

Puerto Rican officials were racing this fall to put together a rescue plan for the pension fund. Voters, though, pushed out Gov. Luis Fortuño, who had tried austerity measures that included cutting tens of thousands of government workers along with a revamping of the fund.

They elected Alejandro García Padilla, who promised to create 50,000 new jobs in the next 18 months. But the margin was razor-thin and Mr. Fortuño has requested a recount. Mr. García Padilla’s party had dropped out of the retirement overhaul effort, but the governor-elect says he will deal with the looming pension crisis with “diligence and promptness” and has put together a task force of economists and financial advisers.

“We will not leave retired government workers stranded at a bus stop in their older years,” he said.

Since the election, yields on the island’s 30-year bonds have continued to widen.

“I don’t think that there’s a default that’s about to happen, but a default isn’t the only bad thing that can happen when you’ve got bonds,” Mr. Schankel said. Puerto Rico’s bonds are just a notch or two above junk status. If they fall to that level, at least some institutions would be forced to sell, potentially setting off a chain reaction. And individual investors could get a jolt if they saw the value of their holdings fall. Many people own Puerto Rican debt without knowing it, through their mutual funds.

“The concern is that Puerto Rico is a systemic risk to the municipal bond market because it’s so widely held,” said Robert Donahue, a managing director with Municipal Market Advisors.

Rafael Matos contributed reporting from San Juan, P.R.

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