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Friday, July 27, 2012

How You Use Coverdell Accounts (or Why You Don\'t)


In this weekend's Your Money column, I took a look at Coverdell education savings accounts, which offer a tax break to people who save money and then use the proceeds for education. The quirk with Coverdells is that people get the break when using the money to pay for tuition at private or religious elementary and secondary schools, though they can use it for college expenses as well. The more well-known 529 college savings plans offer no such tax benefit for people paying primary or secondary school tuition.

No one seems to track how people are using Coverdells, but I'd like to take an unscientific poll here. If you've used the accounts, how have you used them? What tax savings, if any, have you achieved? And if you've considered Coverdells for kindergarten through 12th grade tuition savings and then rejected the idea, why did you do so?

A Retirement Choice With No Right Answer


Many workers still have pension plans, though that number will dwindle as companies increasingly seek to reduce their pension obligations. And some companies may well follow the lead of General Motors, which offered its retirees a choice between a lump sum payout and continuing to receive a monthly check from an annuity.

Paul Sullivan, in his Wealth Matters column this week, said that his first reaction would be to take the lump sum. But the answer for the retirees may not be that simple, since they worry about managing such a big lump sum well enough to last their lifetimes. Yet, if they die at a relatively young age, they may have given up the chance to leave a large amount of money to their heirs.

Paul spoke to experts in retirement and behavioral economics who offered a middle ground: using a portion of the lump sum to buy an annuity and leaving the rest in reserve for unexpected costs.

Of course, these days, anyone with a pension at all is considered among the lucky ones. Are you among them? If so, what would you choose if your company followed G.M.'s lead, and why? Or, if you are a G.M. retiree, what did you do?

Cantor Declines to Criticize Bachmann Over Abedin Charges


Representative Eric Cantor of Virginia, the House majority leader, broke with other prominent Republicans and declined on Friday to criticize Representative Michele Bachmann of Minnesota and other House Republicans who have accused a top aide to Secretary of State Hillary Rodman Clinton of having links to the Muslim Brotherhood.

Ms. Bachmann and four other lawmakers last month sent a letter to the State Department charging that Huma Abedin, a deputy chief of staff in the State Department and a long-time aide to Ms. Clinton, may be a part of a group of Muslims with ties to terrorist organizations alleged to have infiltrated the federal government. Ms. Abedin is the wife of former Representative Anthony Weiner of New York.

Last week, Senator John McCain, Republican of Arizona, made the unusual step of taking the Senate floor to condemn the accusation as “an unwarranted and unfounded attack on an honorable woman, a dedicated American and a loyal public servant.”

Mr. McCain was soon followed by House Speaker John A. Boehner of Ohio, who called the unproved allegations “pretty dangerous.”

In an interview Friday morning on CBS' “This Morning“, one that focused largely on Mr. Cantor's opinions about Mitt Romney and the presidential campaign, the majority leader was asked by host Charlie Rose about his views and religious tolerances. Mr. Rose brought up Ms. Bachmann's accusations, asking Mr. Cantor if they were “out of line.” Mr. Cantor said he believed “her concern was about the security of the country.”

Many Congressional Republicans have been vocal in their criticism of the Muslim Brotherhood and possible homegrown terrorist groups in the United States, but few have been eager to link themselves to Ms. Bachmann's accusations.

An Ocean Away, but Still Shadowed by His Competition


Mitt Romney is traveling overseas on his big foreign trip. And President Obama is with him every step of the way.

With Mr. Romney flitting from Britain to Israel to Poland in the coming days, the Obama camp has made sure to showcase the president doing, well, presidential things related to all three countries.

Mr. Obama said on Friday that he was releasing an additional $70 million in military aid for Israel, to help the country expand production of a short-range rocket defense system. The president also signed a bill in the Oval Office expanding military and civilian cooperation with Israel.

The bill underscores America's “unshakable commitment to Israel,” Mr. Obama said.

Coincidence? Of course not, the White House press secretary, Jay Carney, said.

“I wish it were the case that we could direct Congress and have it do what we wanted on our schedule all the time,† Mr. Carney told dubious reporters at a White House briefing. “The bill the president signed today was passed by Congress, bipartisan majorities, and sent to the White House, I believe, a week ago. And the president has been on the road, and today was the day to sign it.”

O.K., but what about the announcement on Thursday that Mr. Obama felt the “utmost confidence” in Britain's preparedness for the Olympics - an announcement that came just a few hours after Mr. Romney's gaffe in London in which he said there had been “disconcerting” signs of unpreparedness?

Or Defense Secretary Leon E. Panetta's trip to Israel on Sunday? Or the Obama campaign's decision to broadcast an advertisement on Friday night during the opening ceremony of the Olympics, which will be attended by Mr. Romney? Or the announcement that John O. Brennan, a senior adviser, briefed Mr. Obama on security at the Olympics?

So skeptical!

“Whatever country the Olympics were in, this president would have been briefed on security,” Mr. Carney said. “This is a major event, international event, with thousands of Americans present, hundreds of American athletes present, and it's the kind of thing that he would, as a matter of routine preparation, be briefed on, just as he is the Super Bowl and other issues and other major events where there is an American security interest.”

Dick Cheney Sits for ABC News Interview


Dick Cheney, who has been slowly re-entering political life since undergoing heart transplant surgery in March, will sit down today for his first network television interview this year.

Jonathan Karl of ABC News will conduct the interview from Jackson Hole, Wyo., where the former vice president has a home. Portions of the interview will air first on Sunday on ABC's public affairs program “This Week with George Stephanopoulos.” And ABC will use other segments from their exclusive sit-down with Mr. Cheney on Monday during their three major news broadcasts, “Good Morning America,” “World News with Diane Sawyer” and “Nightline.”

Why Mr. Cheney agreed to talk now and what he might have to say is unclear. ABC News has had a standing request to interview him for some time, and learned about a week ago that the former vice president would make himself available.

Mr. Cheney has had a tense relationship with the news media, particularly during the final years of the Bush administration. It's not often that he grants major network television interviews. And when he does, he has often chosen to speak through his network of choice, Fox News. (Though he did sit down for an hourlong discussion televised on CSPAN a few weeks after his heart transplant.)

Mr. Cheney has granted interviews to Mr. Karl of ABC News before, speaking to him after the killing of Osama bin Laden last year and once in 2010.

He has surfaced intermittently this year, weighing in with his feelings about the Obama presidency (“an unmitigated disaster” as he called it at a gathering of Wyoming Republicans in April. And two weeks ago he held a $30,000-per-plate fundraiser


The Agenda: For the United States, Arab Spring Raises Question of Values Versus Interests


CAIRO - Barack Obama came here as a new president in 2009 to proclaim “a new beginning” in American relations with the Muslim world, grounded in support for the dream of Arab democracy and “governments that reflect the will of the people.”

The Agenda

Middle East stability and security post Arab Spring.

He could not have guessed that the demand for Arab democracy would instead become one of his presidency's greatest foreign policy challenges, forcing whoever wins the November election to confront tough trade offs between American values and interests.

The popular uprisings that have swept the region since Mr. Obama's speech in Cairo have upended an authoritarian order that was largely congenial to the United States. While they may have brought Arab nations closer than ever to fulfilling of the pr omise of self-determination that has echoed through the speeches of American presidents since Woodrow Wilson at the end of the First World War, they have also imperiled crucial American allies, empowered antagonistic Islamists, and unleashed sectarian animosities that threaten to drag the whole region toward chaos.

Before the uprisings, a rough balance of power held in check enemies like Iran. Israel and other allies were increasingly secure within their borders. Even Colonel Muammar el-Qaddafi, once the “mad dog of the Middle East,” in President Ronald Reagan's words, was eager for closer ties with the United States, and American diplomats sent high-level emissaries to the Syrian capital, Damascus, in the hope of sweet-talking President Bashar al-Assad at least a few steps away from Tehran and closer to Washington.

Despite the strains caused by the invasion of Iraq and its bloody aftermath, American influence was arguably at an apex in the capitals of the Ar ab world if not the hearts and minds of the its people.

There was one deadly drawback. Washington's support for Arab autocracies drew the fire of militants who despaired of toppling their own monarchs and strongmen. That was the genesis of Al Qaeda. But those same Arab strongmen - including Hosni Mubarak in Egypt, Colonel Qaddafi in Libya, and President Zine al Abidine Ben Ali in Tunisia - were eager to lend their spies and jails to the American fight against terrorism.

For the occupant of the White House, the upheaval has produced at least three pressing dilemmas.

The first is the rising power of Islamists. Democratic elections in Egypt and Tunisia have brought to power Islamist parties historically opposed to United States policies in the region, from Washington's support for Israel to the American invasion of Iraq. At the same time, the toppling of the old secular strongmen has opened up a new debate among Islamists over ju st what Islamic governance should mean, including how to balance respect for individual freedom against traditional religious values. How can American policy makers assess the intents and agenda of the new Islamist leaders? Can the United States build productive alliances with these former foes? In Egypt, should the United States back the elected Islamists of the Muslim Brotherhood in their struggle to pry power from the hands of military leaders? The generals were once Washington's best friends in Egypt but now threaten to curtail the transition to democracy?

The second challenge is the threat the insurgents pose to other undemocratic allies. Here the clearest case is in the tiny, oil-rich Kingdom of Bahrain. It is the home to the American fifth fleet and provides a vital base in the Persian Gulf. But its Sunni Muslim monarchs have used brutal force to crush a largely peaceful democracy movement backed by a Shiite Muslim majority.

Can or should the United States push the king to yield power? Would that risk the rise of Shiite Muslim parties backed by Shiite Muslim Iran? Would it alienate other important allies like the monarchs of Saudi Arabia or Jordan? And if the American president continues to stand by the King of Bahrain - as the Obama administration has - can America still hold itself up as a champion of democratic values in the rest of the region?

The third challenge is the eruption of sectarian animosities long suppressed by the old autocrats. The most explosive case here is Syria. The uprising against Mr. Assad is also a battle between Syria's Sunni Muslim majority and his own minority Alawite Muslim sect, an offshoot of Shiite Islam whose members dominate the Syrian military. Many of the Alawites fear annihilation at the hands of the Sunni insurgents seeking revenge for decades of repression by Mr. Assad and his father, former President Hafez al Assad. Others in the region fear the Syrian conflict could become a regi onal proxy war pitting Shiite Iran on one side against Sunni Muslim Turkey, Saudi Arabia and the gulf states on the other. Sparks from the Syrian fighting have already shown the potential to reignite sectarian violence in neighboring Lebanon, around the border town of Tripoli.

Should the United States lend its support to the rebels challenging Mr. Assad, as Senators John McCain of Arizona and Lindsey Graham of South Carolina, both Republicans, have urged? How well does the United States know the rebels it might aid? And can Western policy makers prevent or contain a descent into sectarian violence, a grander and more catastrophic return of the kind of strife that engulfed neighboring Lebanon in a decade of civil war?

The situation is evolving by the day and often in unpredictable ways. It often seems distant from the domestic economic issues dominating the presidential campaign. But as Mr. Obama has learned since his speech in Cairo three years ago, events, welco me or not, have a way of imposing themselves on the White House.

Over the course of the campaign we will try to present arguments from Washington and the Middle East about how the White House might seek to advance American values and interests after “the new beginning” of the Arab spring. And we will re-examine the challenge over the next few months with each turn of events in the region. We are inviting experts and readers to weigh in and raise questions as we explore the issues, as part of a series we're calling the Agenda.

Friday Reading: Ride-Sharing Services Extend Their Reach


A variety of consumer-focused articles appears daily in The New York Times and on our blogs. Each weekday morning, we gather them together here so you can quickly scan the news that could hit you in your wallet.

The Early Word: Partisan McCain


In Today's Times:

  • The independent maverick and the far-right leaning phases of Senator John McCain's career seem to have given way to a new version: the enthusiastic partisan warrior. Jennifer Steinhauer takes a look at Mr. McCain's efforts to get active again, preaching his party's agenda to reporters and voters, after his disappointing presidential defeat in 2008.
  • Mitt Romney added damage control to his London itinerary after suggesting that the city might not be ready for the Olympics and questioning whether residents would turn out for the Games, Ashley Parker reports. But he was unable to head off a rebuke from Prime Minister David Cameron or to avoid making headlines in the British press.
  • Mr. Romney found support among financiers at high-cost fund-raising events in London Thursday, earning their enthusiasm with his connections to the industry and promises of tax cuts - though his visit with the financial community amid a rate-rigging scandal has risky timing, Ashley Parker and Landon Thomas Jr. report.
  • Rejecting more than a decade of rulings, a federal court recently found that major pharmaceutical companies cannot pay to keep lower-priced generic drugs off the market, a decision that could set up a confrontation before the Supreme Court resulting in changes in drug and health care costs, Ed Wyatt reports.

Washington Happenings:

  • President Obama will sign the United States-Israel Enhanced Security Cooperation Act on Friday before he and Vice President Joseph R. Biden Jr. are scheduled to meet with Ryan C. Crocker, who is stepping down this summer as ambassador to Afghanistan, and then Secretary of State Hillary Rodham Clinton. Later, Mr. Obama will attend campaign events in Washington and McLean, Va.
  • The Commerce Department announces the second quarter gross domestic product.

Amazon\'s Founder Pledges $2.5 Million in Support of Same-Sex Marriage


Jeff Bezos, the billionaire founder of Amazon.com, and his wife, MacKenzie, have agreed to donate $2.5 million to help pass a same-sex marriage referendum in Washington State, instantly becoming among the largest financial backers of gay marriage rights in the country.

With the gift, the couple have doubled the money available to the proponents of Referendum 74, which would legalize same-sex marriage in the state by affirming a law that passed the Legislature this year. Courts or lawmakers have declared gay marriage legal in six other states, but backers of such measures have never succeeded at the ballot box.

Proponents of the effort in Washington State called it a game-changing gift that gives them a fighting chance in November.

“To get this from a straight, married couple sends a powerful message that marriage is seen as a fundamental question of fairness,” Zach Silk, the campaign manager for Washington United for Marriage, said Thursday in an interview.

Mr. Bezos, who founded Amazon.com in 1994 in Seattle and remains its president, now tops a growing list of heterosexual business executives who are replacing wealthy gay people as the some of the biggest donors to the movement behind same-sex marriage and equality for gay men and lesbians. Bill Gates and Steven A. Ballmer of Microsoft each gave $100,000 to the referendum campaign, according to its officials.

But with the seven-figure gift, Mr. Bezos - a famously private executive who runs a $13 billion-a-year retail empire - has now set the bar even higher.

The Bezoses have made the donation as the gay rights movement is encountering both setbacks and achievements. In May, President Obama announced his support for same-sex marriage, saying that after a long evolution he had concluded that “same-sex couples should be able to get married.”

But the push for marriage ri ghts across the country has repeatedly run into well-financed, well-organized opposition. There have been 32 ballot measures that would have legalized same-sex marriage. Opponents have defeated all 32, according to Mr. Silk.

That opposition has mobilized in Washington State. The Web site of the group Preserve Marriage Washington says that “the definition of marriage in Washington is under attack” and argues that “if this law goes unchallenged, voters would have no say and marriage would be changed for every person in our state from being the union of one man and one woman to being a genderless institution.”

Same-sex marriage was legalized by Washington's Legislature in February after a concerted push by Gov. Christine Gregoire, a Democrat. But opponents collected enough signatures to put the legislation to the voters.

Those opposed to Referendum 74 have said they intend to raise as much as $4 million to defeat it and overturn the legislation. Backer s of the law have pledged to raise at least $8 million, and had raised about $2.5 million before the gift by Mr. Bezos and his wife.

The Bezoses declined through a public relations representative to be interviewed. But officials of Washington United for Marriage said the size of the gift was stunning.

Mr. Bezos was approached via e-mail on Sunday by Jennifer Cast, one of Amazon's earliest employees and a lesbian mother of four children who is now a fund-raising chairwoman of the pro-referendum effort.

In her e-mail, sent Sunday evening, Ms. Cast, 50, implored Mr. Bezos to understand the importance of the issue to her and her longtime partner.

“I want to have the right to marry the love of my life and to let my children and grandchildren know their family is honored like a ‘real' family,” Ms. Cast wrote. “We need help from straight people. To be very frank, we need help from wealthy straight people who care about us and who want to help us win. ”

In an interview on Thursday night, Ms. Cast said she had no idea how Mr. Bezos would respond. Though she had worked closely with him when Amazon had only a few dozen employees, she left the company in 2001 and said she had never talked about same-sex marriage with him.

“We were chatting about the biz. We weren't chatting about our lives,” she said, recalling her time at the company. “I never, ever in my life talked to him about gay marriage.”

In the e-mail, Ms. Cast described in detail the pain she endured as a young adult and the difficulties she faced publicly acknowledging her sexuality. At the end, she pointedly asked him to donate between $100,000 and $200,000 to the referendum cause.

“Jeff, I suspect you support marriage equality,” she wrote. “I beg you not to sit on the sidelines and hope the vote goes our way. Help us make it so.”

She hit “send” and waited.

Two days later, on Tuesday, she received a reply wh ile in a car with her family. Recalling that moment, she said she had to read it out loud twice to make sure she had read it right.

“Jen,” the e-mail said, “this is right for so many reasons. We're in for $2.5 million. Jeff & MacKenzie.”