Wall Street Week Ahead: Holiday "on standby" as clock ticks on cliff

NEW YORK (Reuters) - The last two weeks of December are traditionally quiet for stocks, but traders accustomed to a bit of time off are staying close to their mobile devices, thanks to the "fiscal cliff."

Last-minute negotiations in Washington on the so-called fiscal cliff - nearly $600 billion of tax increases and spending cuts set to take effect in January that could cause a sharp slowdown in growth or even a recession - are keeping some traders and analysts from taking Christmas holidays because any deal could have a big impact on markets.

"A lot of firms are saying to their trading desks, 'You can take days off for Christmas, but you are on standby to come in if anything happens.' This is certainly different from previous years, especially around this time of the year when things are supposed to be slowing down," said J.J. Kinahan, chief derivatives strategist at TD Ameritrade in Chicago.

"Next week is going to be a Capitol Hill-driven market."

With talks between President Barack Obama and House Speaker John Boehner at an apparent standstill, it was increasingly likely that Washington will not come up with a deal before January 1.

Gordon Charlop, managing director at Rosenblatt Securities in New York, will also be on standby for the holiday season.

"It's a 'Look guys, let's just rotate and be sensible" type of situation going on," Charlop said.

"We are hopeful there is some resolution down there, but it seems to me they continue to walk that political tightrope... rather than coming up with something."

Despite concerns that the deadline will pass without a deal, the S&P 500 has held its ground with a 12.4 percent gain for the year. For this week, though, the S&P 500 fell 0.3 percent.

BEWARE OF THE WITCH

This coming Friday will mark the last so-called "quadruple witching" day of the year, when contracts for stock options, single stock futures, stock index options and stock index futures all expire. This could make trading more volatile.

"We could see some heavy selling as there is going to be a lot of re-establishing of positions, reallocation of assets before the year-end," Kinahan said.

RETHINKING APPLE

Higher tax rates on capital gains and dividends are part of the automatic tax increases that will go into effect next year, if Congress and the White House don't come up with a solution to avert the fiscal cliff. That possibility could give investors an incentive to unload certain stocks in some tax-related selling by December 31.

Some market participants said tax-related selling may be behind the weaker trend in the stock price of market leader Apple . Apple's stock has lost a quarter of its value since it hit a lifetime high of $705.07 on September 21.

On Friday, the stock fell 3.8 percent to $509.79 after the iPhone 5 got a chilly reception at its debut in China and two analysts cut shipment forecasts. But the stock is still up nearly 26 percent for the year.

"If you owned Apple for a long time, you should be thinking about reallocation as there will be changes in taxes and other regulations next year, although we don't really know which rules to play by yet," Kinahan said.

But one indicator of the market's reduced concern about the fiscal cliff compared with a few weeks ago, is the defense sector, which will be hit hard if the spending cuts take effect. The PHLX Defense Sector Index <.dfx> is up nearly 13 percent for the year, and sits just a few points from its 2012 high.

(Reporting by Angela Moon; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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Egypt Votes on Constitution; Muslim Brotherhood Expects Approval

CAIRO — Supporters and opponents of President Mohamed Morsi sparred on Sunday over the preliminary results of a referendum on a draft constitution, which Egyptians moved toward approving in voting marked by long lines but low voter turnout.

The Muslim Brotherhood, the Islamist group that supports Mr. Morsi, said that around 57 percent of those who cast ballots in the first round on Saturday voted in favor of the proposed constitution, whose drafting was dominated by Islamists. The figure was based on unofficial tallies. A second round of voting is scheduled for this Saturday in rural areas, where the draft constitution is likely to win stronger support.

While the Brotherhood hailed the “political maturity” of voters, opposition leaders disputed the unofficial results and said the voting was marred by irregularities. Each side sought to frame the results as favorable.

Although many people here predicted that the charter would be approved, the turnout was just 31 percent, according the Brotherhood’s estimates. That immediately raised doubts about whether a document intended to express a consensus on Egypt’s identity and lay the foundation of a new government had won legitimacy in the referendum.

Some also said that the low turnout and relatively narrow approval margin dented assumptions about the strength of the Brotherhood, whose extensive grass-roots network had yielded a string of electoral victories since President Hosni Mubarak was toppled in February 2011.

Some Brotherhood officials seemed surprised by the results. “It’s certainly below a lot of expectations,” said Gehad el-Haddad, a senior Brotherhood official. He and others said the polarizing political fight between Mr. Morsi’s supporters and opponents was to blame, causing a broad disillusion with politics and prompting what Mr. Haddad called Egypt’s “silent majority” to stay home.

Still, he argued that the high proportion of “no” votes came not from a rejection of the draft constitution, but rather from anger — justified or otherwise — at the Brotherhood.

“The evaluation was not on the product,” he said. “It was on the producers.”

Resentment against the Brotherhood grew in recent weeks after Mr. Morsi issued a decree insulating his decisions from judicial scrutiny and then hastily called a referendum on the constitution. Many Egyptians also blamed the Brotherhood for deadly clashes outside the presidential palace two weeks ago.

The voting on Saturday was largely peaceful, a respite after weeks of turmoil and a toxic political debate over the constitution.

The arguments started again on Sunday. A coalition of human rights groups called for a revote, saying there were thousands of complaints of violations at the polls and inadequate supervision by judges. The Brotherhood-sponsored Freedom and Justice Party also cited allegations of misbehavior by opponents at polling places, but said that in general the voting was a success. The Egyptian election commission said it would release official results after the second round.

Some opposition figures were hailing the results of the referendum as a small victory for non-Islamist political groups. Amr Hamzawy, the founder of the liberal Free Egypt Party, asserted in a message on Twitter that the relative closeness of the outcome ended the notion that the Brotherhood was unbeatable at the polls. “Saying that democratic currents have no popularity, and that the Brotherhood and their allies monopolize popular will and have the license of the boxes fell yesterday, once and for all,” Mr. Hamzawy wrote.

But analysts said that the voting had left an uncertain landscape. A much better showing for the draft constitution in the next round would probably strengthen Mr. Morsi’s hand. But if current voting patterns continue, Mr. Morsi would just as surely face steep challenges in governing. The Brotherhood could also be seen as more vulnerable in parliamentary elections due after the constitution is adopted.

Mr. Morsi’s problems could start with the charter itself. If it passes narrowly with only about one-third of eligible voters turning out, the document would have legal legitimacy, “but it’s difficult to argue it would have popular legitimacy,” said Zaid al-Ali, who has tracked Egypt’s constitution-writing process for the International Institute for Democratic and Electoral Assistance, based in Sweden. “Politically, it will be a hot potato for a long time to come,” he said.

Many countries require that constitutional referendums exceed a minimum turnout threshold to be valid, out of a belief that the fundamental nature of constitutions means that they must command broad popular support.

Some members of Egypt’s constitutional assembly seemed to agree in principle. Mr. Ali said that several members had told him that they would not be satisfied unless half of eligible voters — not just half of those casting ballots — registered approval. One member was quoted in state news media saying a two-thirds majority in favor was needed for legitimacy. But no such requirements were imposed.

A narrow outcome would oblige the president to “spend a large proportion of his time defending its legitimacy, rather than discussing specific policies,” Mr. Ali said.

Some saw the voting as a referendum not just on the charter, but also on the president’s record after five months in office. “I read this as a strong vote against the dismal, confused performance of the Morsi administration,” said Emad Shahin, a political scientist at the American University in Cairo, about the low turnout and high proportion of “no” votes. Of the president’s Islamist allies, Mr. Shahin said, “I think they thought they were on their way to really secure some kind of comfortable majority for the constitution, which did not happen.”

Whether that assessment is borne out remains to be seen. But Mr. Shahin said that the results so far already showed the need for Mr. Morsi to change his approach to his opponents, who have faulted him for failing to build consensus around contentious decisions. He said that Mr. Morsi’s government needed a transformation of “mentality”: from a state run by the Muslim Brotherhood to a “state that runs an entire country with its all political and social segments.”

Mr. Shahin laid equal blame on the opposition, for resorting to obstructionism rather than compromise at crucial junctures. He called some of the opposition leaders “irresponsible” and said they had engaged in a “massive campaign of disinformation” about the constitution, aided by segments of the news media.

Late on Sunday, opposition leaders signaled that they intended to keep the pressure on Mr. Morsi, calling simultaneously for a large protest on Tuesday, for voters to turn out heavily in the second round next Saturday and for the election commission to consider voiding the first round because of the irregularities.

David D. Kirkpatrick contributed reporting.

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Apple says China iPhone 5 sales in first weekend top two million

(Reuters) – Apple Inc sold more than 2 million of its new iPhone 5 in China during the three days after its launch there on Friday, marking China’s best-selling iPhone rollout ever, the company said late on Sunday.

“Customer response to iPhone 5 in China has been incredible, setting a new record with the best first weekend sales ever in China,” Apple Chief Executive Tim Cook said in a statement.

Apple’s latest iPhone, which offers a larger 4-inch screen and 4G capability, was launched in the United States and 30 other countries in September, when the company sold more than 5 million of the devices in the first three days.

The device’s highly anticipated release in China, Apple’s second-biggest market, failed to stop the recent share slide of the world’s most valuable technology company, and analysts said Apple’s longer-term China hopes may hinge on a partnership with China Mobile Ltd, the country’s top telecoms carrier.

(Reporting by Sakthi Prasad in Bangalore; Editing by Edmund Klamann)

Tech News Headlines – Yahoo! News

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Drew Barrymore's Baby & Miley Cyrus's Outfit Get Readers' Top Reactions

By Julia Haskins

12/16/2012 at 09:30 PM EST

Drew Barrymore and Olive. Miley Cyrus

Michael Tran/Filmmagic

We love knowing what's on your mind when you read articles on PEOPLE.com, and as always, you gave us plenty of great feedback this week.

Your emotions ranged from "aww" at the photos of Drew Barrymore's daughter Olive, to "ugh" when it came to Miley Cyrus's questionable outfit choice. You also mourned the loss of a legend, singer Jenni Rivera.

Keep letting us know what's making you smile, frown, or LOL each week by clicking on the buttons at the bottom of every article.

You were nearly as thrilled to welcome Drew Barrymore's baby as the proud mom herself! The actress is over the moon about her new daughter Olive, and describes her feelings for her little as "like the biggest crush I've ever had in my life!"

You were highly impressed by professional builder Johan Huibers's latest creation: A full-scale replica of Noah's Ark. The wooden vessel – which is 427 feet long, 95 feet wide and 75 feet high – is a feat of, well, biblical proportions!

You were heartbroken over the news that Mexican-American singer Jenni Rivera was killed in a plane crash shortly after takeoff early Sunday. Rivera, who was known as the Diva of Banda and sold over 20 million albums worldwide, was 43. Her family is also mourning the tragic loss.

Miley Cyrus didn't leave much to the imagination with a revealing outfit worn on stage at a concert in Hollywood. Readers were angry about the young starlet's ensemble, which consisted of tight pants, knee-high snakeskin boots and a peekaboo top that showed more than just a little cleavage.

Well, this is awkward. You weren't too upset about Track Palin filing for divorce from wife Britta Hanson after a year and a half. Their parting made readers LOL. Palin, the oldest son of former Alaska governor Sarah Palin, and Hanson were former high school sweethearts.

Check back next week for another must-read roundup, and see what readers are reacting to every day here.

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Experts: No link between Asperger's, violence

NEW YORK (AP) — While an official has said that the 20-year-old gunman in the Connecticut school shooting had Asperger's syndrome, experts say there is no connection between the disorder and violence.

Asperger's is a mild form of autism often characterized by social awkwardness.

"There really is no clear association between Asperger's and violent behavior," said psychologist Elizabeth Laugeson, an assistant clinical professor at the University of California, Los Angeles.

Little is known about Adam Lanza, identified by police as the shooter in the Friday massacre at a Newtown, Conn., elementary school. He fatally shot his mother before going to the school and killing 20 young children, six adults and himself, authorities said.

A law enforcement official, speaking on condition of anonymity because the person was not authorized to discuss the unfolding investigation, said Lanza had been diagnosed with Asperger's.

High school classmates and others have described him as bright but painfully shy, anxious and a loner. Those kinds of symptoms are consistent with Asperger's, said psychologist Eric Butter of Nationwide Children's Hospital in Columbus, Ohio, who treats autism, including Asperger's, but has no knowledge of Lanza's case.

Research suggests people with autism do have a higher rate of aggressive behavior — outbursts, shoving or pushing or angry shouting — than the general population, he said.

"But we are not talking about the kind of planned and intentional type of violence we have seen at Newtown," he said in an email.

"These types of tragedies have occurred at the hands of individuals with many different types of personalities and psychological profiles," he added.

Autism is a developmental disorder that can range from mild to severe. Asperger's generally is thought of as a mild form. Both autism and Asperger's can be characterized by poor social skills, repetitive behavior or interests and problems communicating. Unlike classic autism, Asperger's does not typically involve delays in mental development or speech.

Experts say those with autism and related disorders are sometimes diagnosed with other mental health problems, such as depression, anxiety, bipolar disorder or obsessive-compulsive disorder.

"I think it's far more likely that what happened may have more to do with some other kind of mental health condition like depression or anxiety rather than Asperger's," Laugeson said.

She said those with Asperger's tend to focus on rules and be very law-abiding.

"There's something more to this," she said. "We just don't know what that is yet."

After much debate, the term Asperger's is being dropped from the diagnostic manual used by the nation's psychiatrists. In changes approved earlier this month, Asperger's will be incorporated under the umbrella term "autism spectrum disorder" for all the ranges of autism.

__

AP Writer Matt Apuzzo contributed to this report.

___

Online:

Asperger's information: http://1.usa.gov/3tGSp5

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Wall Street Week Ahead: Holiday "on standby" as clock ticks on cliff

NEW YORK (Reuters) - The last two weeks of December are traditionally quiet for stocks, but traders accustomed to a bit of time off are staying close to their mobile devices, thanks to the "fiscal cliff."

Last-minute negotiations in Washington on the so-called fiscal cliff - nearly $600 billion of tax increases and spending cuts set to take effect in January that could cause a sharp slowdown in growth or even a recession - are keeping some traders and analysts from taking Christmas holidays because any deal could have a big impact on markets.

"A lot of firms are saying to their trading desks, 'You can take days off for Christmas, but you are on standby to come in if anything happens.' This is certainly different from previous years, especially around this time of the year when things are supposed to be slowing down," said J.J. Kinahan, chief derivatives strategist at TD Ameritrade in Chicago.

"Next week is going to be a Capitol Hill-driven market."

With talks between President Barack Obama and House Speaker John Boehner at an apparent standstill, it was increasingly likely that Washington will not come up with a deal before January 1.

Gordon Charlop, managing director at Rosenblatt Securities in New York, will also be on standby for the holiday season.

"It's a 'Look guys, let's just rotate and be sensible" type of situation going on," Charlop said.

"We are hopeful there is some resolution down there, but it seems to me they continue to walk that political tightrope... rather than coming up with something."

Despite concerns that the deadline will pass without a deal, the S&P 500 has held its ground with a 12.4 percent gain for the year. For this week, though, the S&P 500 fell 0.3 percent.

BEWARE OF THE WITCH

This coming Friday will mark the last so-called "quadruple witching" day of the year, when contracts for stock options, single stock futures, stock index options and stock index futures all expire. This could make trading more volatile.

"We could see some heavy selling as there is going to be a lot of re-establishing of positions, reallocation of assets before the year-end," Kinahan said.

RETHINKING APPLE

Higher tax rates on capital gains and dividends are part of the automatic tax increases that will go into effect next year, if Congress and the White House don't come up with a solution to avert the fiscal cliff. That possibility could give investors an incentive to unload certain stocks in some tax-related selling by December 31.

Some market participants said tax-related selling may be behind the weaker trend in the stock price of market leader Apple . Apple's stock has lost a quarter of its value since it hit a lifetime high of $705.07 on September 21.

On Friday, the stock fell 3.8 percent to $509.79 after the iPhone 5 got a chilly reception at its debut in China and two analysts cut shipment forecasts. But the stock is still up nearly 26 percent for the year.

"If you owned Apple for a long time, you should be thinking about reallocation as there will be changes in taxes and other regulations next year, although we don't really know which rules to play by yet," Kinahan said.

But one indicator of the market's reduced concern about the fiscal cliff compared with a few weeks ago, is the defense sector, which will be hit hard if the spending cuts take effect. The PHLX Defense Sector Index <.dfx> is up nearly 13 percent for the year, and sits just a few points from its 2012 high.

(Reporting by Angela Moon; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)

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IHT Rendezvous: China Calls for 'No Delay' on Gun Controls in U.S.

HONG KONG — The state news agency in China, the official voice of the government, has called for the United States to quickly adopt stricter gun controls in the aftermath of the shooting rampage in Connecticut that left 28 people dead, including 20 schoolchildren.

According to the state medical examiner who was overseeing autopsies of the children, all of them had been hit multiple times. At least one child had been shot 11 times.

All of the children were in the first grade.

“Their blood and tears demand no delay for U.S. gun control,” said the news agency, Xinhua, which listed a series of shootings this year in the United States.

“However, this time, the public feels somewhat tired and helpless,” the commentary said. “The past six months have seen enough shooting rampages in the United States.”

China suffered its own school tragedy on Friday — a man stabbed 22 children at a village elementary school in Henan Province. An 85-year-old woman also was stabbed.

There were no fatalities, although Xinhua reported that some of the children had had their fingers and ears cut off. The attacker, a 36-year-old man, was reportedly in custody. There was no immediate explanation for his possible motives.

China experienced a spate of attacks on schoolchildren in 2010, with almost 20 deaths and more than 50 injuries. In the fourth of the assaults, a crazed man beat five toddlers with a hammer, then set himself on fire while holding two youngsters.

In another of those attacks in 2010, Zheng Minsheng, 42, stabbed and killed eight primary school students in Fujian Province. Five weeks later, after a quick trial, he was executed.

My colleague Michael Wines reported at the time: “Some news reports stated that Mr. Zheng had mental problems, but most state media said no such evidence existed. Mental illness remains a closeted topic in modern China, and neither medication nor modern psychiatric treatment is widely used.”

“Most of the attackers have been mentally disturbed men involved in personal disputes or unable to adjust to the rapid pace of social change in China,” The Associated Press reported Saturday, adding that the rampages pointed to “grave weaknesses in the antiquated Chinese medical system’s ability to diagnose and treat psychiatric illness.”

Private ownership of guns — whether pistols, rifles or shotguns — is almost unheard of in China. Handgun permits are sometimes (but rarely) given to people living in remote areas for protection against wild animals.

The Chinese school assaults were carried out with knives, kitchen cleavers or hammers, the usual weapons of choice in mass attacks in China. As a precaution before the recent Communist Party Congress in Beijing, the sale of knives was banned in the central area of the capital.

Dr. Ding Xueliang, a sociologist at the University of Science and Technology in Hong Kong, speaking about the Chinese tragedy, told CNN that “the huge difference between this case and the U.S. is not the suspect, nor the situation, but the simple fact he did not have an effective weapon.

“In terms of the U.S., there’s much easier availability of killing instruments — rifles, machine guns, explosives — than in nearly every other developed country.”

In a blog on the Web site of The New Yorker, the magazine’s China correspondent, Evan Osnos, wrote:

It takes a lot to make China’s government — beset, as it is, by corruption and opacity and the paralyzing effects of special interests — look good, by comparison, in the eyes of its people these days. But we’ve done it.

When Chinese viewers looked at the two attacks side by side, more than a few of them concluded, as one did that, “from the look of it, there’s no difference between a ‘developed’ country and a ‘developing’ country. And there’s no such thing as human rights. People are the most violent creatures on earth, and China, with its ban on guns, is doing pretty well!”

Japan, too, has a near-total ban on private gun ownership, and the infrequent mass attacks there — which included a tragic rampage at a primary school in 2001— typically have involved knives.

“Almost no one in Japan owns a gun,” said Max Fisher, writing in The Atlantic in July. “Most kinds are illegal, with onerous restrictions on buying and maintaining the few that are allowed. Even the country’s infamous, mafia-like Yakuza tend to forgo guns; the few exceptions tend to become big national news stories.”

In 2006, Japan had two gun-related homicides. “And when that number jumped to 22 in 2007,” Mr. Fisher said, “it became a national scandal.”

“East Asia, despite its universally restrictive domestic gun policies, hosts some of the world’s largest firearm exporters and emerging industry giants: China, South Korea and Japan,” according to GunPolicy.org, a comprehensive global database maintained by the Sydney School of Public Health at the University of Sydney.

In recent weeks, Chinese police officials in Jiangsu Province seized more than 6,000 illegal guns from two underground workshops and warehouses; a retired prison guard in Hong Kong was jailed for 18 months for keeping an arsenal of guns, silencers, grenades and thousands of rounds of ammunition in his public-housing apartment; and 17 suspected gun smugglers went on trial in Shanghai as part of a joint investigation with U.S. law enforcement officials.

In the Shanghai case, more than 100 semiautomatic handguns, rifles, shotguns and gun parts were express-mailed to China from the United States. One of the masterminds on the American end was Staff Sgt. Joseph Debose, 30, a soldier with a Special Forces National Guard unit in North Carolina. He pleaded guilty to federal charges in September.

“The defendant traded the honor of his position in the National Guard for the money he received for smuggling arms to China,” said Loretta E. Lynch, U.S. Attorney for the Eastern District of New York. “In blatant disregard for everything he was sworn to uphold, the defendant placed numerous firearms into a black market pipeline from the United States to China.”

What’s your view? Would the United States do well to emulate China and Japan, with their comprehensive bans on guns? Or is America a special case because of its Constitutional protections of gun ownership? And apropos of the Fujian attack described above, would you support similarly speedy trials and the death penalty for mass murderers of children?

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RIM shows how BlackBerry 10 touch screen keys could rival even its traditional keyboards [video]

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Donald Faison Marries Cacee Cobb

By Lesley Messer

12/15/2012 at 08:25 PM EST

Cacee Cobb and Donald Faison

Dr. Billy Ingram/WireImage

It's official!

After six years together, Donald Faison and Cacee Cobb were married Saturday night at the Los Angeles home of his Scrubs costar Zach Braff.

Cobb's friend Jessica Simpson was a bridesmaid. Sister Ashlee Simpson also attended.

"What a happy day," Tweeted groomsman Joshua Radin, a singer, who posted a photo of himself with Faison and Braff in their tuxedos.

The couple got engaged in August 2011. At the time, Faison Tweeted, "If you like it then you better put a Ring on it," and Cobb replied, "If she likes it then she better say YES!!"

Since then, the couple had been hard at work planning their wedding. On Nov. 12, Faison, who currently stars on The Exes, Tweeted that they were tasting cocktails to be served on the big day.

"Alcohol tasting for the wedding!" he wrote, adding a photo of the drinks. "The [sic] Ain't Say It Was Going To Be Like This!!!"

This is the first marriage for Cobb. Faison was previously married to Lisa Askey, with whom he has three children. (He also has a son from a previous relationship.)

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Fewer health care options for illegal immigrants

ALAMO, Texas (AP) — For years, Sonia Limas would drag her daughters to the emergency room whenever they fell sick. As an illegal immigrant, she had no health insurance, and the only place she knew to seek treatment was the hospital — the most expensive setting for those covering the cost.

The family's options improved somewhat a decade ago with the expansion of community health clinics, which offered free or low-cost care with help from the federal government. But President Barack Obama's health care overhaul threatens to roll back some of those services if clinics and hospitals are overwhelmed with newly insured patients and can't afford to care for as many poor families.

To be clear, Obama's law was never intended to help Limas and an estimated 11 million illegal immigrants like her. Instead, it envisions that 32 million uninsured Americans will get access to coverage by 2019. Because that should mean fewer uninsured patients showing up at hospitals, the Obama program slashed the federal reimbursement for uncompensated care.

But in states with large illegal immigrant populations, the math may not work, especially if lawmakers don't expand Medicaid, the joint state-federal health program for the poor and disabled.

When the reform has been fully implemented, illegal immigrants will make up the nation's second-largest population of uninsured, or about 25 percent. The only larger group will be people who qualify for insurance but fail to enroll, according to a 2012 study by the Washington-based Urban Institute.

And since about two-thirds of illegal immigrants live in just eight states, those areas will have a disproportionate share of the uninsured to care for.

In communities "where the number of undocumented immigrants is greatest, the strain has reached the breaking point," Rich Umbdenstock, president of the American Hospital Association, wrote last year in a letter to Obama, asking him to keep in mind the uncompensated care hospitals gave to that group. "In response, many hospitals have had to curtail services, delay implementing services, or close beds."

The federal government has offered to expand Medicaid, but states must decide whether to take the deal. And in some of those eight states — including Texas, Florida and New Jersey — hospitals are scrambling to determine whether they will still have enough money to treat the remaining uninsured.

Without a Medicaid expansion, the influx of new patients and the looming cuts in federal funding could inflict "a double whammy" in Texas, said David Lopez, CEO of the Harris Health System in Houston, which spends 10 to 15 percent of its $1.2 billion annual budget to care for illegal immigrants.

Realistically, taxpayers are already paying for some of the treatment provided to illegal immigrants because hospitals are required by law to stabilize and treat any patients that arrive in an emergency room, regardless of their ability to pay. The money to cover the costs typically comes from federal, state and local taxes.

A solid accounting of money spent treating illegal immigrants is elusive because most hospitals do not ask for immigration status. But some states have tried.

California, which is home to the nation's largest population of illegal immigrants, spent an estimated $1.2 billion last year through Medicaid to care for 822,500 illegal immigrants.

The New Jersey Hospital Association in 2010 estimated that it cost between $600 million and $650 million annually to treat 550,000 illegal immigrants.

And in Texas, a 2010 analysis by the Health and Human Services Commission found that the agency had provided $96 million in benefits to illegal immigrants, up from $81 million two years earlier. The state's public hospital districts spent an additional $717 million in uncompensated care to treat that population.

If large states such as Florida and Texas make good on their intention to forgo federal money to expand Medicaid, the decision "basically eviscerates" the effects of the health care overhaul in those areas because of "who lives there and what they're eligible for," said Lisa Clemans-Cope, a senior researcher at the Urban Institute.

Seeking to curb expenses, hospitals might change what qualifies as an emergency or cap the number of uninsured patients they treat. And although it's believed states with the most illegal immigrants will face a smaller cut, they will still lose money.

The potential impacts of reform are a hot topic at MD Anderson Cancer Center in Houston. In addition to offering its own charity care, some MD Anderson oncologists volunteer at a county-funded clinic at Lyndon B. Johnson General Hospital that largely treats the uninsured.

"In a sense we've been in the worst-case scenario in Texas for a long time," said Lewis Foxhall, MD Anderson's vice president of health policy in Houston. "The large number of uninsured and the large low-income population creates a very difficult problem for us."

Community clinics are a key part of the reform plan and were supposed to take up some of the slack for hospitals. Clinics received $11 billion in new funding over five years so they could expand to help care for a swell of newly insured who might otherwise overwhelm doctors' offices. But in the first year, $600 million was cut from the centers' usual allocation, leaving many to use the money to fill gaps rather than expand.

There is concern that clinics could themselves be inundated with newly insured patients, forcing many illegal immigrants back to emergency rooms.

Limas, 44, moved to the border town of Alamo 13 years ago with her husband and three daughters. Now single, she supports the family by teaching a citizenship class in Spanish at the local community center and selling cookies and cakes she whips up in her trailer. Soon, she hopes to seek a work permit of her own.

For now, the clinic helps with basic health care needs. If necessary, Limas will return to the emergency room, where the attendants help her fill out paperwork to ensure the government covers the bills she cannot afford.

"They always attended to me," she said, "even though it's slow."

___

Sherman can be followed on Twitter at https://twitter.com/chrisshermanAP .

Plushnick-Masti can be followed on Twitter at https://twitter.com/RamitMastiAP .

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