DealBook: Mortgage Interest Deduction Is Now Seen as Vulnerable

A tax break that has long been untouchable could soon be in for some serious manhandling.

Many home buyers deduct their mortgage interest when assessing their tax bill, a perk that has helped bolster the income of millions of families — and the broader housing market.

But as President Obama and Congress try to hash out a deal to reduce the budget deficit, the mortgage interest deduction looks vulnerable. Limits on a broad array of deductions could emerge in any budget deal. It is likely that any caps would be structured to aim at high-income households, and would diminish or end the mortgage tax break for many of those taxpayers.

“This is definitely a chance worth jumping for,” said Amir Sufi, a professor at the Booth School of Business at the University of Chicago. “For a fixed amount of revenue, it’s better to remove deductions than increase marginal tax rates.”

Such a move would be fiercely opposed by the real estate industry. The industry has played a crucial role in defending the tax break, even as other countries with high homeownership have phased it out.

Housing market players who oppose any whittling down of the mortgage deduction still have time to press their case. If President Obama and Congress manage to reach an agreement to avoid the looming tax raises and spending cuts, their deal will be broad in nature. Then, over the following months, Congress will hash out details, like any caps on deductions.

“Until Congress introduces specific legislation, there’s nothing to say about any proposed changes to the mortgage interest deduction,” Gary Thomas, president of the National Association of Realtors, said in an e-mailed statement. “However, it has always been the N.A.R.’s position that the mortgage interest deduction is vital to the stability of the American housing market and economy, and we will remain vigilant in opposing any future plan that modifies or excludes the deductibility of mortgage interest.”

One of the reasons the mortgage tax break is so vulnerable is that both Democrats and Republicans have recently favored capping deductions, including both President Obama and the recent Republican presidential nominee, Mitt Romney.

What is more, deductions could be used to grease a compromise in the budget negotiations. High earners would be hit most by deduction limits, something that might make Republicans recoil. But the party may tolerate such a policy in return for a deal that limits how much actual tax rates go up for high-income households.

Tax numbers suggest it may not be hard to structure deduction limits in a way that leaves most middle-income households untouched.

With the mortgage interest deduction, households realized tax savings of $83 billion in 2010, according to figures from the Reason Foundation. Nearly $65 billion, or 78 percent of those savings, went to households earning $100,000 or more.

There are a range of ways to increase tax revenue by aiming at higher earners, some less comprehensive than others. For instance, the interest deduction relating to second homes could be ended. Also, the cap on mortgage debt eligible for the interest rate deduction — currently $1 million — could be reduced.

There are broader approaches, too. In its proposed budget, the Obama administration plans to focus on top earners. The administration suggests capping deductions at 28 percent for high-income households, those earning more than $250,000.

Under the current rules, a high-earning household deducting $20,000 in interest payments would probably apply a 35 percent rate to that amount and receive $7,000 in tax savings. The Obama budget aims to limit that tax saving by capping that rate at 28 percent. If that rate were applied to $20,000 of interest payments, the saving would fall to $5,800.

The United States would capture the difference. Over the next 10 years, that 28 percent cap could increase tax revenue by $584 billion, according to the Treasury Department.

Separately, the Obama administration also wants to limit high earners’ deductions by letting certain Bush-era exemptions expire. Altogether, the Treasury Department thinks it could raise $749 billion over 10 years by limiting deductions for higher earners. That’s substantially more than the $684 billion it thinks it could raise from increasing their tax rates.

Still, there are situations where certain middle-income earners do get hit by deduction limits.

Consider a policy that uses a dollar limit, and caps all deductions at $35,000. That amount would be plenty to cover most middle-income households’ mortgage interest, state and local taxes and charitable giving.

But people earnings more than $100,000 may start to reach the limit, according to Sidney B. Rosenberg, associate professor emeritus at the University of North Florida. He assumes a household earns $110,000 and has a $300,000 mortgage on which it pays $17,500 a year. It also pays property taxes and state taxes at estimated nationally average rates. Such a family would have nearly $35,000 of deductible expenses, Dr. Rosenberg calculates.

One argument against curtailing the mortgage deduction is that it could reduce demand for housing, depressing home prices when the housing market is still somewhat weak. The National Association of Realtors believes a removal of the deduction could reduce property values by 15 percent, according to a presentation last year from its chief economist, Lawrence Yun.

Other analysts say they believe the housing industry overstates the potential impact. With several forms of government subsidy also supporting housing, it’s hard to single out the effect of the mortgage deduction. At the most, the Reason Foundation estimates, the deduction may bolster house prices by 3 percent.

Since any deduction cap is likely to aim at higher earners, expensive houses would be most affected. But big-ticket homes appear much more resilient to shocks than lower-cost dwellings.

CoreLogic, a housing data company, tracks data that effectively divides the market into higher- and lower-cost houses, grouping them based on the size of the mortgages. The prices of the higher-cost houses are up 5.9 percent since the start of 2005, before the housing crash. In contrast, the houses at the lower end have fallen 13.5 percent in price since the beginning of 2005.

Given the apparent sturdiness of the higher end of the housing market, politicians may decide there are few risks in effectively capping mortgage deductions for high earners. Limiting tax breaks in a way that could reduce mortgage relief would be a change for Washington, which has done so much to support housing.

Nick Kasprak, an analyst at the Tax Foundation, said that up until recently he didn’t expect to see a cap on deductions. “But now,” he said, “it seems both parties are open to pursuing this strategy.”

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Saudi telco regulator suspends Mobily prepaid sim sales

(Reuters) – Saudi Arabia‘s No.2 telecom operator Etihad Etisalat Co (Mobily) has been suspended from selling pre-paid sim cards by the industry regulator, the firm said in a statement to the kingdom’s bourse on Sunday.

Mobily’s sales of pre-paid, or pay-as-you-go, sim cards will remain halted until the company “fully meets the prepaid service provisioning requirements,” the telco said in the statement.

These requirements include a September order from regulator, Communication and Information Technology Commission (CITC). This states all pre-paid sim users must enter a personal identification number when recharging their accounts and that this number must be the same as the one registered with their mobile operator when the sim card was bought, according to a statement on the CITC website.

This measure is designed to ensure customer account details are kept up to date, the CITC said.

Mobily said the financial impact of the CITC’s decision would be “insignificant”, claiming data, corporate and postpaid revenues would meet its main growth drivers.

The firm, which competes with Saudi Telecom Co (STC) and Zain Saudi, reported a 23 percent rise in third-quarter profit in October, beating forecasts.

Prepaid mobile subscriptions are typically more popular among middle and lower income groups, with telecom operators pushing customers to shift to monthly contracts that include a data allowance.

Customers on monthly, or postpaid, contracts are also less likely to switch provider, but the bulk of customers remain on pre-paid accounts.

Mobily shares were trading down 1.4 percent at 0820 GMT on the Saudi bourse.

(Reporting by Matt Smith; Editing by Dinesh Nair)

Tech News Headlines – Yahoo! News

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Bangladesh Fire Kills More Than 100 and Injures Many

MUMBAI — More than 100 people died Saturday and Sunday in a fire at a garment factory outside Dhaka, Bangladesh, in one of the worst industrial tragedies in that country.

It took firefighters all night to put out the blaze at the factory, Tazreen Fashions, after it started about 7 p.m. on Saturday, a retired fire official said by telephone from Dhaka, the capital. At least 111 people were killed, and scores of workers were taken to hospitals for treatment of burns and smoke inhalation.

“The main difficulty was to put out the fire; the sufficient approach road was not there,” said the retired official, Salim Nawaj Bhuiyan, who now runs a fire safety company in Dhaka. “The fire service had to take great trouble to approach the factory.”

Bangladesh’s garment industry, the second-largest exporter of clothing after China, has a notoriously poor fire safety record. Since 2006, more than 500 Bangladeshi workers have died in factory fires, according to Clean Clothes Campaign, an antisweatshop advocacy group in Amsterdam. Experts say many of the fires could have been easily avoided if the factories had taken the right precautions. Many factories are in cramped neighborhoods and have too few fire escapes, and they widely flout safety measures. The industry employs more than three million workers in Bangladesh, most of them women.

Activists say that global clothing brands like Tommy Hilfiger and the Gap and those sold by Walmart need to take responsibility for the working conditions in Bangladeshi factories that produce their clothes.

“These brands have known for years that many of the factories they choose to work with are death traps,” Ineke Zeldenrust, the international coordinator for the Clean Clothes Campaign, said in a statement. “Their failure to take action amounts to criminal negligence.”

The fire at the Tazreen factory in Savar, northwest of Dhaka, started in a warehouse on the ground floor that was used to store yarn, and quickly spread to the upper floors. The building was nine stories high, with the top three floors under construction, according to an garment industry official at the scene who asked not to be named because he was not authorized to speak to the news media. Though most workers had left for the day when the fire started, the industry official said as many as 600 workers were still inside working overtime.

The factory, which opened in May 2010, employed about 1,500 workers and had sales of $35 million a year, according to a document on the company’s Web site. It made T-shirts, polo shirts and fleece jackets.

Most of the workers who died were on the first and second floors, fire officials said, and were killed because there were not enough exits. None of them opened to the outside.

“The factory had three staircases, and all of them were down through the ground floor,” said Maj. Mohammad Mahbub, the operations director for the Fire Department, according to The Associated Press. “So the workers could not come out when the fire engulfed the building.”

In a telephone interview later on Sunday, Major Mahbub said the fire could have been caused by an electrical fault or by a spark from a cigarette.

In a brief phone call, Delowar Hossain, the managing director of the Tuba Group, the parent company of Tarzeen Fashions, said he was too busy to comment. “Pray for me,” he said and then hung up.

Television news reports showed badly burned bodies lined up on the floor in what appeared to be a government building. The injured were being treated in hallways of local hospitals, according to the reports.

The industry official said that many of the bodies were burned beyond recognition and that it would take some time to identify them.

One survivor, Mohammad Raju, 22, who worked on the fifth floor, said he escaped by climbing out of a third-floor window onto the bamboo scaffolding that was being used by construction workers. He said he lost his mother, who also worked on the fifth floor, when they were making their way down.

“It was crowded on the stairs as all the workers were trying to come out from the factory,” Mr. Raju said. “There was no power supply; it was dark, and I lost my mother in dark. I tried to search for her for 10 to 15 minutes but did not find her.”

A document posted on Tarzeen Fashions’ Web site indicated that an “ethical sourcing” official for Walmart had flagged “violations and/or conditions which were deemed to be high risk” at the factory in May 2011, though it did not specify the nature of the infractions. The notice said that the factory had been given an “orange” grade and that any factories given three such assessments in two years from their last audit would not receive any Walmart orders for a year.

It was unclear whether Walmart had suspended the company or was still buying clothes from it. The Web sites of Tuba Group lists the retailer and others like Carrefour, a French retail chain, as customers. A spokesman for Walmart, Kevin Gardner, said the company was “so far unable to confirm that Tazreen is supplier to Walmart nor if the document referenced in the article is in fact from Walmart.”

Bangladesh exports about $18 billion worth of garments a year. Employees in the country’s factories are among the lowest-paid in the world, with entry-level workers making a government-mandated minimum wage of about $37 a month.

Tensions have been running high between workers, who have been demanding an increase in minimum wages, and the factory owners and government. A union organizer, Aminul Islam, who campaigned for better working conditions and higher wages, was found tortured and killed outside Dhaka this year.

Fire safety remains weak across much of South Asia. In September, nearly 300 workers were killed in a fire at a textile factory in Karachi, Pakistan, just weeks before it passed an inspection that covered several issues, including health and safety.

Julfikar Ali Manik contributed reporting from Dhaka, Bangladesh, and Stephanie Clifford from New York.

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Notre Dame still the 1 in AP rankings

NEW YORK (AP) — Notre Dame is No. 1 in The Associated Press college football rankings with nothing left to do but wait to find out who its opponent in the national championship game will be.

Toward the bottom of the rankings, there was plenty of movement. Ten Top 25 teams lost this weekend, the most since Oct. 11, 2003.

No. 2 Alabama and No. 3 Georgia, both easy winners in rivalry games Saturday, held their spots in the rankings and will play for the SEC title in Atlanta next weekend.

Ohio State remained No. 4 after completing its perfect season with a victory against Michigan. The Buckeyes (12-0) are banned from the postseason because of NCAA sanctions.

Florida moved up a spot to No. 5 after beating Florida State.

Four teams from BCS non-automatic qualifying leagues are ranked. No. 18 Kent State and No. 19 Northern Illinois will play for the Mid-American Conference title Friday. No. 20 Utah State wrapped up its season as Western Athletic Conference champ.

No. 25 Boise State will play for a share of the Mountain West title against Nevada on Saturday.

The Big East had two teams fall out of the rankings, Rutgers and Louisville. The Scarlet Knights and Cardinals will play Thursday night with the Big East title and BCS bid on the line.

Boise State and No. 22 Northwestern moved back into the rankings.

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M.I.T. Lab Hatches Ideas, and Companies, by the Dozens

HOW do you take particles in a test tube, or components in a tiny chip, and turn them into a $100 million company?

Dr. Robert Langer, 64, knows how. Since the 1980s, his Langer Lab at the Massachusetts Institute of Technology has spun out companies whose products treat cancer, diabetes, heart disease and schizophrenia, among other diseases, and even thicken hair.

The Langer Lab is on the front lines of turning discoveries made in the lab into a range of drugs and drug delivery systems. Without this kind of technology transfer, the thinking goes, scientific discoveries might well sit on the shelf, stifling innovation.

A chemical engineer by training, Dr. Langer has helped start 25 companies and has 811 patents, issued or pending, to his name. That’s not too far behind Thomas Edison, who had 1,093. More than 250 companies have licensed or sublicensed Langer Lab patents.

Polaris Venture Partners, a Boston venture capital firm, has invested $220 million in 18 Langer Lab-inspired businesses. Combined, these businesses have improved the health of many millions of people, says Terry McGuire, co-founder of Polaris.

Along the way, Dr. Langer and his lab, including about 60 postdoctoral and graduate students at a time, have found a way to navigate some slippery territory: the intersection of academic research and the commercial market.

Over the last 30 years, many universities — including M.I.T. — have set up licensing offices that oversee the transfer of scientific discoveries to companies. These offices have become a major pathway for universities seeking to put their research to practical use, not to mention add to their revenue streams.

In the sciences in particular, technology transfer has become a key way to bring drugs and other treatments to market. “The model of biomedical innovation relies on research coming out of universities, often funded by public money,” says Josephine Johnston, director of research at the Hastings Center, a bioethics research organization based in Garrison, N.Y.

Just a few of the products that have emerged from the Langer Lab are a small wafer that delivers a dose of chemotherapy used to treat brain cancer; sugar-sequencing tools that can be used to create new drugs like safer and more effective blood thinners; and a miniaturized chip (a form of nanotechnology) that can test for diseases.

The chemotherapy wafer, called the Gliadel, is licensed by Eisai Inc. The company behind the sugar-sequencing tools, Momenta Pharmaceuticals, raised $28.4 million in an initial public offering in 2004. The miniaturized chip is made by T2Biosystems,  which completed a $23 million round of financing in the summer of 2011.

“It’s inconvenient to have to send things to a lab,” so the company is trying to develop more sophisticated methods, says Dr. Ralph Weissleder, a co-founder, with Dr. Langer and others, of T2Biosystems and a professor at Harvard Medical School.

FOR Dr. Langer, starting a company is not the same as it was, say, for Mark Zuckerberg with Facebook. “Bob is not consumed with any one company,” says H. Kent Bowen, an emeritus professor of business administration at Harvard Business School who wrote a case study on the Langer Lab. “His mission is to create the idea.”

Dr. Bowen observes that there are many other academic laboratories, including highly productive ones, but that the Langer Lab’s combination of people, spun-out companies and publications sets it apart. He says Dr. Langer “walks into the great unknown and then makes these discoveries.”

Dr. Langer is well known for his mentoring abilities. He is “notorious for replying to e-mail in two minutes, whether it’s a lowly graduate school student or the president of the United States,” says Paulina Hill, who worked in his lab from 2009 to 2011 and is now a senior associate at Polaris Venture Partners. (According to Dr. Langer, he has corresponded directly with President Obama about stem cell research and federal funds for the sciences.)

Dr. Langer says he looks at his students “as an extended family,” adding that “I really want them to do well.”

And they have, whether in business or in academia, or a combination of the two. One former student, Ram Sasisekharan, helped found Momenta and now runs his own lab at M.I.T. Ganesh Venkataraman Kaundinya is Momenta’s chief scientific officer and senior vice president for research.

Hongming Chen is vice president of research at Kala Pharmaceuticals. Howard Bernstein is chief scientific officer at Seventh Sense Biosystems, a blood-testing company. Still others have taken jobs in the law or in government.

Dr. Langer says he spends about eight hours a week working on companies that come out of his lab. Of the 25 that he helped start, he serves on the boards of 12 and is an informal adviser to 4. All of his entrepreneurial activity, which includes some equity stakes, has made him a millionaire. But he says he is mainly motivated by a desire to improve people’s health.

Operating from the sixth floor of the David H. Koch Institute for Integrative Cancer Research on the M.I.T. campus in Cambridge, Mass., Dr. Langer’s lab has a research budget of more than $10 million for 2012, coming mostly from federal sources.

The research in labs like Dr. Langer’s is eyed closely by pharmaceutical companies. While drug companies employ huge research and development teams, they may not be as freewheeling and nimble, Dr. Langer says. The basis for many long-range discoveries has “come out of academia, including gene therapy, gene sequencing and tissue engineering,” he says.

He has served as a consultant to pharmaceutical companies. Their large size, he says, can end up being an impediment.

“Very often when you are going for real innovation,” he says, “you have to go against prevailing wisdom, and it’s hard to go against prevailing wisdom when there are people who have been there for a long time and you have some vice president who says, ‘No, that doesn’t make sense.’ ”

Pharmaceutical companies are eager to tap into the talent at leading research universities. In 2008, for example, Washington University in St. Louis announced a $25 million pact with Pfizer to collaborate more closely on biomedical research.

But in some situations, the close — critics might say cozy — ties between business and academia have the potential to create conflicts of interest.

There was a controversy earlier this year when it was revealed that the president of the University of Texas M.D. Anderson Cancer Center owned stock in Aveo Oncology, which had announced earlier that the university would be leading clinical trials of one of its cancer drugs.  Last month, the University of Texas announced that he would be allowed to keep his ties with three pharmaceutical companies, including Aveo Oncology; his holdings will be placed in a blind trust.

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Legal Consensus of Warrantless Cellphone Searches Is Elusive

Judges and lawmakers across the country are wrangling over whether and when law enforcement authorities can peer into suspects’ cellphones, and the cornucopia of evidence they provide.

Peter DaSilva for The New York Times

Organizations like the Electronic Frontier Foundation, where Hanni Fakhoury is a lawyer, have lobbied for legislation that would require authorities to obtain a warrant before demanding cellphone location records.

A Rhode Island judge threw out cellphone evidence that led to a man being charged with the murder of a 6-year-old boy, saying the police needed a search warrant. A court in Washington compared text messages to voice mail messages that can be overheard by anyone in a room and are therefore not protected by state privacy laws. In Louisiana, a federal appeals court is weighing whether location records stored in smartphones deserve privacy protection, or whether they are “business records” that belong to the phone companies.

“The courts are all over the place,” said Hanni Fakhoury, a criminal lawyer with the Electronic Frontier Foundation, a San Francisco-based civil liberties group. “They can’t even agree if there’s a reasonable expectation of privacy in text messages that would trigger Fourth Amendment protection.”

The issue will attract attention on Thursday when a Senate committee considers limited changes to the Electronic Communications Privacy Act, a 1986 law that regulates how the government can monitor digital communications. Courts have used it to permit warrantless surveillance of certain kinds of cellphone data. A proposed amendment would require the police to obtain a warrant to search e-mail, no matter how old it was, updating a provision that currently allows warrantless searches of e-mails more than 180 days old.

As technology races ahead of the law, courts and lawmakers are still trying to figure out how to think about the often intimate data that cellphones contain, said Peter P. Swire, a law professor at Ohio State University. Neither the 1986 statute nor the Constitution, he said, could have anticipated how much information cellphones are privy to, including detailed records of people’s travels and diagrams of their friends.

“It didn’t take into account what the modern cellphone has — your location, the content of communications that are easily readable, including Facebook posts, chats, texts and all that stuff,” Mr. Swire said.

Courts have also issued divergent rulings on when and how cellphones can be inspected. An Ohio court ruled that the police needed a warrant to search a cellphone because, unlike a piece of paper that might be stuffed inside a suspect’s pocket and can be confiscated during an arrest, a cellphone may hold “large amounts of private data.”

But California’s highest court said the police could look through a cellphone without a warrant so long as the phone was with the suspect at the time of arrest.

Judges across the country have written tomes about whether a cellphone is akin to a “container” — like a suitcase stuffed with marijuana that the police might find in the trunk of a car — or whether, as the judge in the Rhode Island murder case suggested, it is more comparable to a face-to-face conversation. That judge, Judith C. Savage, described text messages as “raw, unvarnished and immediate, revealing the most intimate of thoughts and emotions.” That is why, she said, citizens can reasonably expect them to be private.

There is little disagreement about the value of cellphone data to the police. In response to a Congressional inquiry, cellphone carriers said they responded in 2011 to 1.3 million demands from law enforcement agencies for text messages and other information about subscribers.

Among the most precious information in criminal inquiries is the location of suspects, and when it comes to location records captured by smartphones, court rulings have also been inconsistent. Privacy advocates say a trail of where people go is inherently private, while law enforcement authorities say that consumers have no privacy claim over signals transmitted from an individual mobile device to a phone company’s communications tower, which they refer to as third-party data.

Delaware, Maryland and Oklahoma have proposed legislation that would require the police to obtain a warrant before demanding location records from cellphone carriers. California passed such a law in August after intense lobbying by privacy advocates, including Mr. Fakhoury’s group. But Gov. Jerry Brown, a Democrat, vetoed the bill, questioning whether it struck “the right balance between the operational needs of law enforcement and individual expectations of privacy.”

Similar legislation has been proposed in Congress.

Lacking a clear federal statute, the courts have been unable to reach a consensus. In Texas, a federal appeals court said this year that law enforcement officials did not need a warrant to track suspects through cellphones. In Louisiana, another federal appeals court is considering a similar case. Prosecutors are arguing that location information is part of cellphone carriers’ business records and thus not constitutionally protected.

The Supreme Court has not directly tackled the issue, except to declare, in a landmark ruling this year, that the police must obtain a search warrant to install a GPS tracking device on someone’s private property.

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Russia blames technical error for brief YouTube blacklisting

MOSCOW (Reuters) – Russian officials offered assurances they were not seeking to block access to YouTube on Wednesday, saying a technical error caused the popular video-sharing website to appear briefly on a register of sites containing banned content.

For about an hour, YouTube was listed on the newly-created register, which the government says is needed to fight child pornography but critics of President Vladimir Putin fear may be used to censor the Internet and stifle dissent.

YouTube was subsequently removed from the register, maintained by Russia‘s communications watchdog agency, Roskomnadzor, which said there was no plan to block access to the site.

“An unfortunate technical mistake occurred,” Roskomnadzor spokesman Vladimir Pikov said. “We work closely with them (YouTube). Basically, we see no reason now to apply towards its owners any preventive measures.”

Russia’s consumer protection rights watchdog, Rospotrebnadzor, said YouTube took down several videos earlier this week as requested by officials under the new law tightening Internet controls that took effect on November 1.

The blacklist includes websites containing pornographic images of children, instructions on how to make, use and where to get drugs, as well as others describing suicide methods.

Under the legislation, websites have three days to remove content considered harmful or illegal by Russian authorities before they can be blocked.

YouTube is owned by U.S.-based Google Inc..

A spokeswoman for Google in Russia, Alla Zabrovskaya, said all requests from the authorities are handled by the company’s global headquarters in the United States.

Anti-Putin activists, who have used the Internet to organize demonstrations, say the law is part of a crackdown on dissent orchestrated by the Kremlin since Putin, a former KGB spy, returned to presidency in May.

After a stint as prime minister, Putin was elected to a third presidential term in March after a series of opposition protests that were the biggest of his 13-year rule.

(Additional reporting by Maria Tsvetkova and Anastasia Teterevleva; Editing by Steve Gutterman and Sophie Hares)

Internet News Headlines – Yahoo! News

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Morsi Urged to Retract Edict to Bypass Judges in Egypt

Tara Todras-Whitehill for The New York Times

A demonstrator takes a breather during protests in downtown Cairo on Saturday. More Photos »

CAIRO — The association of judges here called Saturday for courts across Egypt to suspend all but their most vital activities to protest an edict by President Mohamed Morsi granting himself unchecked power by setting his decrees above judicial review until the ratification of a new constitution.

The judges’ strike, which drew the support of the leader of the national lawyers’ association, would be the steepest escalation yet in a political struggle between the country’s new Islamist leaders and the institutions of the authoritarian government that was overthrown last year. As it spills into the courts and the streets, the dispute also increasingly threatens to undermine the credibility of Egypt’s political transition as well.

A council that oversees the judiciary denounced Mr. Morsi’s decree, which was issued Thursday, as “an unprecedented attack on judicial independence,” and urged the president to retract parts of the decree eliminating judicial oversight.

State news media reported that judges and prosecutors had already walked out in Alexandria, and there were other news reports of walkouts in Qulubiya and Beheira, but those could not be confirmed.

Outside Egypt’s high court in Cairo, the police fired tear gas at protesters who were denouncing Mr. Morsi and trying to force their way into the building, the second day in a row that protesters took to the streets over the presidential decree, which critics have assailed as a return to autocracy.

Abdel Meguid Mahmoud, a prosecutor appointed by Mr. Morsi’s predecessor, Hosni Mubarak, declared to a crowd of cheering judges that the presidential decree was “null and void.” He denounced what he described as “the systematic campaign against the country’s institutions in general and the judiciary in particular.”

A coalition of disparate opposition leaders including the liberal former United Nations diplomat Mohamed ElBaradei, the leftist-nationalist Hamdeen Sabahy, and the former Mubarak-government foreign minister Amr Moussa formed a self-proclaimed National Salvation Front to oppose the decree. In addition to demanding the dissolution of the constitutional assembly, the group declared that it would not speak with Mr. Morsi until he withdrew his decree.

“We will not enter into a dialogue about anything while this constitutional declaration remains intact and in force,” Mr. Moussa said. “We demand that it be withdrawn and then we can talk.”

As the judges group called for a suspension of the courts, a growing number of lawyers filed claims demanding that the courts seek to overturn Mr. Morsi’s decree, joining the battle between the executive and judicial powers.

Advisers to Mr. Morsi, a former leader of the Muslim Brotherhood and Egypt’s first democratically elected president, defended his action, saying he was trying to prevent the courts from disbanding the Islamist-dominated constitutional assembly, which is writing a new constitution. The nation’s top courts had already dissolved the Islamist-led parliament and an earlier Islamist-led constituent assembly.

The advisers said a court decision on the new constitutional assembly had been expected as soon as next Sunday.

The judges’ group, as well as the newly unified secular opposition, have demanded that Mr. Morsi withdraw his decree, and that he disband and replace the current constitutional assembly. Many of the assembly’s non-Islamist members, including secularists and representatives of the Coptic Church, had already quit the body to protest the Islamists’ domination.

The increasingly vocal criticism of the assembly threatens to undermine the legitimacy of the ultimate charter, and has only increased the likelihood that the Islamist leaders may seek to pass and ratify it on their own, over the opposition of other groups, further damaging its credibility.

The opposition to the decree has also reinforced the fears of Islamists that judges appointed by Mr. Mubarak and the secular opposition were deliberately seeking to derail the process rather than accept their defeats at the polls.

Nevine Ramzy and Mai Ayyad contributed reporting.

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Undefeated: No. 4 Ohio State over No. 20 UM, 26-21

COLUMBUS, Ohio (AP) — The only thing Urban Meyer lost during his first season at Ohio State was his cool — at the end of the last game.

Carlos Hyde ran for 146 yards and the fourth-ranked Buckeyes' defense shut out No. 20 Michigan in the second half to grab a bruising 26-21 win on Saturday, completing an improbable 12-0 season for the Buckeyes.

Meyer got emotional as the final seconds ticked off, embracing his players on the floor of a raucous Ohio Stadium. Too emotional, he said later.

"I've got to keep a little more composure, I guess," he said sheepishly. "In the coaching manual, I think it's chapter 13, it says, 'Keep cool.' I lost it there for a couple of minutes."

Well, give the guy a break.

Almost no one — up to and including Meyer — expected such a rapid turnaround for the Buckeyes, who were just 6-7 last season with a loss to their archrivals in a transitional year when they were facing heavy NCAA penalties. A month after Meyer took the job last November, they were socked with a bowl ban after this season — and still ran the table.

Ohio State (12-0, 8-0 Big Ten) is ineligible for a BCS national title but still has an outside shot at finishing No. 1 in the final Associated Press Top 25 if other contenders lose. Michigan (8-4, 6-2) will now await a minor bowl bid.

"At this point in time, Ohio State can go and play with anybody in America," Meyer said. "I wouldn't say that five weeks ago, but you've seen the growth, what we did today and the growth of our defense."

Drew Basil matched his season output with four field goals and the defense did the rest, forcing three turnovers in the second half.

It was played before 105,899, the largest crowd ever to witness "The Game" in Columbus.

Meyer and his players were mobbed by thousands of fans who flooded the field after the Buckeyes' ninth victory in the last 11 years in the rivalry (the 2010 win was later vacated by the sanctions).

"It'll go down as one of the great teams in Ohio State history," Meyer exulted.

Hyde also ran for a touchdown. Braxton Miller completed 14 of 18 passes for 189 yards and a score to Corey Brown, who had eight catches for 95 yards.

The Buckeyes had already clinched the Big Ten's Leaders Division, but aren't allowed to play in next Saturday's conference title game. Michigan needed a win to capture a share of the Legends Division with Nebraska, which will meet Wisconsin for the championship.

"I like the W better," said Hoke, who won his debut in The Game a year ago.

Now, about Ohio State can hope for is every other top team in the nation — including the only other unbeaten, top-ranked Notre Dame — to lose and lose badly in the coming weeks. A team banned from the postseason has never finished No. 1 in the AP Top 25 poll, and the Buckeyes are not eligible for the Bowl Championship Series rankings or coaches' poll.

Michigan's Denard Robinson had a brilliant first half, scoring on a 67-yard run, but was largely invisible in the second. He totaled 122 yards on 10 carries, but had lost 2 yards on his four carries after halftime.

"We know the reason we lost the game," Robinson said. "We had three turnovers in the second half. That's not acceptable."

Devin Gardner, the other half of Michigan's quarterback tandem, was 11 of 20 for 171 yards with an interception and a 75-yard touchdown pass to Roy Roundtree.

For the Buckeyes, the game will be remembered for the staunch defense played when most needed. Michigan had 26 plays for 219 yards in the first half, then ran 21 plays for a net of 60 yards in the second.

For the Wolverines, there will be lingering questions for Hoke, who wore short sleeves in the freezing temperatures — just like Woody Hayes used to during the 1960s and 1970s in the rivalry.

With his team ahead 21-20, Hoke called timeout on fourth and 2 near midfield on Michigan's first possession of the second half. Robinson then tried the middle, but ran into linebacker Ryan Shazier for a two-yard loss.

That cost the Wolverines the lead as Ohio State drove to the Michigan 11 before settling for Basil's 28-yard field goal, putting the Buckeyes up 23-21.

"We've got to have each other's back," Hoke said. "We didn't get it and (our own) defense went out there and did a nice job."

Gardner fumbled when hit by Johnathan Hankins with 8:19 left, with Travis Howard pouncing on the loose ball after several players had a shot at it. Taking over at the Wolverines' 10, the Buckeyes could not move the ball and were forced to settle for Basil's fourth field goal of the game, a 25-yarder with 6:26 remaining, for a 26-21 lead.

Basil came into the game just 4 for 6 on the year.

The last turnover ended the Wolverines' hopes.

Gardner tossed a floater that was intercepted by C.J. Barnett, ending the Wolverines final threat as Hyde carried the ball repeatedly and the Buckeyes played keep-away to the finish.

Between the first and second quarters, Ohio State honored its 2002 national championship team. After a highlight clip was shown to a roaring crowd, several players hoisted coach Jim Tressel to their shoulders and carried him out of the end zone.

No boos were heard, or else they were drowned out — even though it was Tressel's NCAA violations, he failed to report players exchanging team memorabilia for cash and tattoos, which will keep this year's unbeaten Buckeyes home in the postseason.

Asked if — should his team end up as the only unbeaten in the nation — it should be crowned No. 1 in the AP poll, Meyer said:

"I'm not going to get into the 'what ifs.' You can't control what you can't control. ... We're 12-0 and I'm going to see to it when you walk into that Woody Hayes (practice) facility that this team will never be forgotten. Because they deserve that."

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Follow Rusty Miller on Twitter: http://www.twitter.com/rustymillerap

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Indian Prostitutes’ New Autonomy Imperils AIDS Fight

MUMBAI, India — Millions once bought sex in the narrow alleys of Kamathipura, a vast red-light district here. But prostitutes with inexpensive mobile phones are luring customers elsewhere, and that is endangering the astonishing progress India has made against AIDS.

Indeed, the recent closings of hundreds of ancient brothels, while something of an economic victory for prostitutes, may one day cost them, and many others, their lives.

“The place where sex happens turns out to be an important H.I.V. prevention point,” said Saggurti Niranjan, program associate of the Population Council. “And when we don’t know where that is, we can’t help stop the transmission.”

Cellphones, those tiny gateways to modernity, have recently allowed prostitutes to shed the shackles of brothel madams and strike out on their own. But that independence has made prostitutes far harder for government and safe-sex counselors to trace. And without the advice and free condoms those counselors provide, prostitutes and their customers are returning to dangerous ways.

Studies show that prostitutes who rely on cellphones are more susceptible to H.I.V. because they are far less likely than their brothel-based peers to require their clients to wear condoms.

In interviews, prostitutes said they had surrendered some control in the bedroom in exchange for far more control over their incomes.

“Now, I get the full cash in my hand before we start,” said Neelan, a prostitute with four children whose side business in sex work is unknown to her husband and neighbors. (Neelan is a professional name, not her real one.)

“Earlier, if the customer got scared and didn’t go all the way, the madam might not charge the full amount,” she explained. “But if they back out now, I say that I have removed all my clothes and am going to keep the money.”

India has been the world’s most surprising AIDS success story. Though infections did not appear in India until 1986, many predicted the nation would soon become the epidemic’s focal point. In 2002, the C.I.A.’s National Intelligence Council predicted that India would have as many as 25 million AIDS cases by 2010. Instead, India now has about 1.5 million.

An important reason the disease never took extensive hold in India is that most women here have fewer sexual partners than in many other developing countries. Just as important was an intensive effort underwritten by the World Bank and the Bill and Melinda Gates Foundation to target high-risk groups like prostitutes, gay men and intravenous drug users.

But the Gates Foundation is now largely ending its oversight and support for AIDS prevention in India, just as efforts directed at prostitutes are becoming much more difficult. Experts say it is too early to identify how much H.I.V. infections might rise.

“Nowadays, the mobility of sex workers is huge, and contacting them is very difficult,” said Ashok Alexander, the former director in India of the Gates Foundation. “It’s a totally different challenge, and the strategies will also have to change.”

An example of the strategies that had been working can be found in Delhi’s red-light district on Garstin Bastion Road near the old Delhi railway station, where brothels have thrived since the 16th century. A walk through dark alleys, past blind beggars and up narrow, steep and deeply worn stone staircases brings customers into brightly lighted rooms teeming with scores of women brushing each other’s hair, trying on new dresses, eating snacks, performing the latest Bollywood dances, tending small children and disappearing into tiny bedrooms with nervous men who come out moments later buttoning their trousers.

A 2009 government survey found 2,000 prostitutes at Garstin Bastion (also known as G. B.) Road who served about 8,000 men a day. The government estimated that if it could deliver as many as 320,000 free condoms each month and train dozens of prostitutes to counsel safe-sex practices to their peers, AIDS infections could be significantly reduced. Instead of broadcasting safe-sex messages across the country — an expensive and inefficient strategy commonly employed in much of the world — it encircled Garstin Bastion with a firebreak of posters with messages like “Don’t take a risk, use a condom” and “When a condom is in, risk is out.”

Surprising many international AIDS experts, these and related tactics worked. Studies showed that condom use among clients of prostitutes soared.

“To the credit of the Indian strategists, their focus on these high-risk groups paid off,” said Dr. Peter Piot, the former executive director of U.N.AIDS and now director of the London School of Hygiene and Tropical Medicine. A number of other countries, following India’s example, have achieved impressive results over the past decade as well, according to the latest United Nations report, which was released last week.

Sruthi Gottipati contributed reporting in Mumbai and New Delhi.

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