Hopes rise for "fiscal cliff" deal as Obama, Boehner meet

WASHINGTON (Reuters) - The differences over how to resolve the "fiscal cliff" narrowed significantly Monday night as President Barack Obama made a counter-offer to Republicans that included a major change in position on tax hikes for the wealthy, according to a source familiar with the talks.

The move, which the source stressed was not Obama's final offer, was welcomed, albeit with reservations, by a spokesman for Republican House of Representatives Speaker John Boehner, who met earlier in the day with Obama as the two hammered out a way to avert steep tax hikes and indiscriminate spending reductions set for the beginning of 2013.

In its most dramatic change in position yet, the White House proposed leaving lower tax rates in place for everyone except those earning $400,000 and above, the source said on condition of anonymity. That's up from the $250,000 threshold the president has been demanding for months, but still far from Boehner's preference of $1 million.

Obama also moved closer to Boehner on the proportion of a ten-year deficit reduction package that should come from increased revenue, as opposed to cuts in government spending. Obama is now willing to accept a revenue figure of $1.2 trillion, down from his previous $1.4 trillion proposal.

Boehner's latest proposal calls for $1 trillion in new tax revenue, which would come from raising rates and limiting deductions that the wealthiest can take.

Some of the savings in spending proposed by Obama would come from reducing the size of cost-of-living increases for all but the most "vulnerable" recipients of the Social Security retirement program, the source said, through the use of a different formula to calculate the regular raises called "chained Consumer Price Index."

In the most hopeful sign, the source stressed that this was by no means the final offer from the White House.

The response from Boehner's spokesman was also a positive signal. "Any movement away from the unrealistic offers the president has made previously is a step in the right direction," the spokesman said, emphasizing that differences remain on spending levels in particular.

"We hope to continue discussions with the president so we can reach an agreement that is truly balanced and begins to solve our spending problem."

The rapid developments Monday evening put a deal realistically within reach.

The two men held talks at the White House earlier Monday and aides from both parties said they were optimistic an agreement was shaping up.

Though Obama and Boehner appeared to be edging closer to an agreement, substantial hurdles remain. Rank-and-file Republicans could have trouble with the tax increases on the wealthiest Americans that are likely to be part of any deal, while Obama could have a tough time selling spending cuts to his fellow Democrats.

But investors were cheered earlier Monday, before news broke of Obama's counter-offer, by signs of progress and the Standard & Poor's 500 index of U.S. stocks rose 1.19 percent.

Economists warn that going over the fiscal cliff could push the economy into recession.

Senate Democratic leader Harry Reid said his chamber will wrap up work on the issue after Christmas.

"It appears that we're going to be coming back the day after Christmas to complete work on the fiscal cliff," he said on the Senate floor.

Boehner faces a crucial test on Tuesday morning when he is expected to brief his party's lawmakers in the Republican-controlled House. He is not expected to bring any deal up for a vote unless a majority of the 241 House Republicans support it.

Republicans have campaigned for decades on a promise to keep taxes low, but Boehner in recent days has edged closer to Obama's demand to raise tax rates on top earners. In return, Obama could back a measure that would slow the rate of growth of Social Security benefits by changing the way they are measured against inflation, according to a Senate Democratic aide.

GETTING CLOSER ON TAXES

If there are no strong objections, he could try to finalize the deal with Obama on Wednesday, a Republican aide said.

Both sides declined to say what Boehner and Obama discussed at the meeting, which was also attended by Treasury Secretary Timothy Geithner.

The White House said Boehner's latest proposal does not meet its standards.

"Thus far, the president's proposal is the only proposal that we have seen that achieves the balance that is so necessary," White House spokesman Jay Carney said at a news briefing.

Republicans understand that the clock is ticking and they are confident that Boehner will get a deal they can support in the coming days, a senior House Republican aide said.

Republicans want substantial spending cuts in return for increased tax revenue, but any proposal to trim popular benefit programs like the Medicare health insurance plan for seniors will face fierce resistance from liberal Democrats, whose votes will be needed to get a deal passed.

Obama could also face strong opposition from Democrats if he agrees to Boehner's proposal to slow the growth of Social Security benefits by changing the way the cost-of-living increases are measured against inflation, an approach that could save $200 billion over 10 years.

Obama also wants to head off another confrontation over the U.S. debt limit, which will need to be raised in the coming months. Republicans insist that any increase in the government's $16.4 trillion borrowing authority must be paired with an equal reduction in spending.

(Additional reporting by Thomas Ferraro, Mark Felsenthal, Rachelle Younglai and Jeff Mason; Writing by Andy Sullivan; Editing by Alistair Bell, Eric Beech and Paul Simao)

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Liberal Democratic Party Returns to Power in Japan

Christopher Jue/European Pressphoto Agency

Japanese poll workers counted ballots at a polling station in Tokyo during parliamentary elections on Sunday.

TOKYO — Japan’s voters handed a landslide victory to the Liberal Democratic Party in national parliamentary elections on Sunday, giving power back to the conservative party that had governed Japan for decades until a historic defeat three years ago.

In a chaotic election crowded with new parties making sweeping promises, from abolishing nuclear power after the Fukushima accident to creating an American-style federal system, the Liberal Democrats prevailed with their less radical vision of reviving the recession-bound economy and standing up to China. A victory would all but ensure that the Liberal Democratic leader, Shinzo Abe, a former prime minister who is one Japan’s most outspoken nationalists, would be able to form a new government.

Some here saw the victory pointing to a greater willingness by this long pacifist nation to accept Mr. Abe’s calls for a stronger military at a time when Japan faces an intensifying showdown with China over disputed islands.

However, the dominant view of Sunday’s vote was that it was not so much a weakening of Japan’s desire for drastic change, or a swing to an anti-Chinese right, as a rebuke of the incumbent Democrats. They swept aside the Liberal Democrats with bold vows to overhaul Japan’s sclerotic postwar order, only to disappoint voters by failing to deliver on economic improvements. Mr. Abe acknowledged as much, saying that his party had simply ridden a wave of public disgust in the failures of his opponents.

“We recognize that this was not a restoration of confidence in the Liberal Democratic Party, but a rejection of three years of incompetent rule by the Democratic Party,” Mr. Abe, 58, told reporters. Now, his party will be left to address deepening public frustration on a host of issues, including a contracting economy and a teetering pension system.

In the powerful lower house, the Liberal Democrats held a commanding lead with 294 of the 480 seats up for grabs. That would be almost a mirror image of the results in 2009, when the Democrats won 308 seats.

In the current election, a dozen parties fielded a total of 1,504 candidates, the largest number ever. But in a sign of the election’s failure to excite, only 59 percent of voters cast ballots, one of the lowest turnouts on record.

The Democrats suffered a crushing defeat, with just 57 seats, putting them only four seats ahead of the largest new party, the Japan Restoration Party, started by Osaka’s popular mayor. It was a huge setback for the Democrats, whose landmark victory three years ago ended the Liberal Democrats’ virtual one-party monopoly on power, and seemed to herald the start of a competitive two-party democracy.

Taking responsibility for the loss, Prime Minister Yoshihiko Noda resigned as head of the Democratic Party, despite holding on to to his own seat in Chiba, outside Tokyo.

“We failed to meet the people’s hopes after the change of government three years and four months ago,” he told reporters.

In a sign of how far the pendulum had swung against the incumbents, former Prime Minister Naoto Kan lost his seat in a Tokyo suburb in a tight race with a relatively unknown Liberal Democratic challenger. Other prominent party members also lost their seats in what party members conceded was a rout.

“We tried the Democratic Party for three years, and it was a total disaster,” said Hideyuki Takizawa, 52, a stockbroker voting in the Tokyo suburb of Kawagoe. He said that in the last election he voted for the Democrats, but that this time he opted for the Liberal Democrats. “I have higher hopes now in the Liberal Democratic Party, especially in foreign affairs,” he said.

The victorious Liberal Democrats take over a nation that faces deepening problems, including a ballooning national debt, a growing trade deficit and a rapidly aging population. Upon declaring victory, Mr. Abe quickly vowed to help the faltering economy by quickly passing a huge new stimulus spending bill, and called ending deflation his top priority. He also vowed to give relief to the nation’s beleaguered export sector with more aggressive steps to drive down the yen to make Japanese products cheaper abroad.

Makiko Inoue contributed reporting from Kawagoe, Japan.

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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.

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AP Writer Matt Apuzzo contributed to this report.

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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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In Brazil, Caves Would Be Lost in Mining Project

Lalo de Almeida for The New York Times

A speleologist from Vale, the Brazilian mining giant, in October at a cave in the Carajás Mountains, where it plans to expand an iron-ore mining complex.

CARAJÁS NATIONAL FOREST, Brazil — Archaeologists must climb tiers of orchid-encrusted rain forest, where jaguars roam and anacondas slither, to arrive at one of the Amazon’s most stunning sights: a series of caves and rock shelters guarding the secrets of human beings who lived here more than 8,000 years ago.

Almost anywhere else, these caves would be preserved as an invaluable source of knowledge into prehistoric human history. But not in this remote corner of the Amazon, where Vale, the Brazilian mining giant, is pushing forward with the expansion of one of the world’s largest iron-ore mining complexes, a project that will destroy dozens of the caves treasured by scholars.

The caves, and the spectacular mineral wealth in their midst, have presented Brazil with a dilemma. The iron ore from Carajás, exported largely to China where it is used to make steel, is a linchpin of Brazil’s ambitions of reviving a sluggish economy, yet archaeologists and other researchers contend that the emphasis on short-term financial gains imperils an unrivaled window into a nebulous past.

“This is a crucial moment to learn about the human history of the Amazon, and by extension the peopling of the Americas,” said Genival Crescêncio, a caver and historian in Pará State, which includes Carajás. “We should be preserving this unique place for science, but we are destroying it so the Chinese can open a few more car factories.”

As Brazil embarks on a frenzied effort to increase mining and improve infrastructure, work crews in the Amazon and beyond are unearthing one startling discovery after another. In Rio de Janeiro, archaeologists are examining a slave market and cemetery where thousands of Africans were buried. The discoveries have complicated the upgrade of the harbor and public transportation network ahead of the 2016 Olympic Games.

Brazilian courts can require companies to preserve archaeological sites, or at least transfer archaeological material to universities or museums where it can be studied, before work continues. In some cases, rulings have stalled huge projects, as Anglo American, the mining giant, discovered this year when prosecutors halted work on a large mining project in Minas Gerais State over concerns that an archaeologically significant cave could be damaged.

Scholars say that the caves of Carajás, which archaeologists began exploring in the 1980s, offer coveted insight into what may be the earliest known stages of human settlement in the world’s largest tropical rain forest, helping to piece together the puzzle of how the Americas came to be inhabited.

Pieces of ceramic vessels and tools made of amethyst and quartz are among the signs of human occupation from thousands of years ago. Such artifacts, along with the abundance of the caves and rock shelters themselves, make Carajás one of the Amazon’s most important places for the study of prehistoric humans.

The Amazon is already a hotbed of archaeological investigation, as researchers find evidence that far more people might have lived in the region than once considered possible. While the Amazon was once thought incapable of supporting large, sophisticated societies, researchers now contend that the region might have been home to thriving urban centers before the arrival of Columbus.

Before those cities were carved out of the forest, people lived in the Amazon’s caves. At Pedra Pintada, a cave that, like those in Carajás, is also in Pará, Anna C. Roosevelt, an American archaeologist, has shown that hunter-gatherers moved to the region 10,900 to 11,200 years ago, far earlier than once thought, about the same time people in North American were hunting mammoths.

Outside the Amazon, remarkable discoveries have been announced in recent months at other Brazilian sites. At Lapa do Santo, a rock shelter near the city of Belo Horizonte, archaeologists said this year that they had found the New World’s oldest known figurative petroglyph. The rock art, a drawing of a man with an oversize phallus, is thought to have been made 10,500 to 12,000 years ago.

To reach the caves of Carajás, researchers must drive hours along washboard roads cut through the jungle, before scaling escarpments with spectacular views of the Carajás Mountains, a range of canopied peaks rising out of the forest. Macaws fly overhead and bats swirl inside the earth cavities in which hunting tribes once found shelter.

Some of the caves, substantially cooler inside their openings than the surrounding forest, are large enough for more than a dozen people; others might have provided just enough space for two or three people.

Vale, then a state-owned company, began developing the iron ore deposits here after they were discovered in 1967 by a Brazilian geologist on assignment to find manganese for the U.S. Steel Corporation. Vale has since been privatized, but the government still controls big equity stakes.

Thanks largely to its Carajás complex, where thousands of workers labor 24 hours a day amid the clamor of digging machines, Vale accounts for 16 percent of Brazil’s total exports. As Vale grapples with a sharp decline in profits this year and delays at projects outside Brazil, Carajás is expected to become more important.

Vale has said it plans to create 30,000 jobs in the expansion of iron-ore mining at Carajás, a $20 billion project called Serra Sul, which is already luring thousands of migrants from around Brazil to this frenetic part of the Amazon.

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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."

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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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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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