World and Nation

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Republicans seeking election wary of embracing the tea party

WASHINGTON — The success of Tea Party-backed lawmakers in defining the terms of the debt debate in Washington has further cemented the party’s identity as part of a conservative movement insistent on deep spending cuts, lower taxes and smaller government.

But as Republican candidates gear up for 2012, many are struggling with whether to embrace those passions. Opposing the debt ceiling increase and linking with the Tea Party may help candidates tap into a reservoir of energy in their party’s electorate. But it also threatens to alienate the candidates from independent voters who grimaced at the bickering in Washington and preferred greater compromise.

“The process didn’t please anyone, but it was very clear that the new congressmen elected in 2010 dramatically shifted the debate from how much more shall we spend to how much shall we cut,” said Whit Ayres, a Republican pollster.

In the 2012 elections, the strategic calculation for Republican candidates weighing Tea Party ties “depends on the state, depends on the politician and it depends on the particular race,” he said.

Evidence of political uncertainty is everywhere, and this week’s debt votes in Congress highlighted the Republican soul-searching, doing little to clarify a simple path to Republican victory.

—Michael D. Shear, The New York Times

Cubans prepare for big step toward capitalism

HAVANA — Jose is an eager almost-entrepreneur with big plans for Cuban real estate. Right now he works illegally on trades, linking up families who want to swap homes and pay a little extra for an upgrade.

But when Cuba legalizes buying and selling by the end of the year — as the government promised again this week — Jose and many others expect a cascade of changes: higher prices, mass relocation, property taxes and a flood of money from Cubans in the United States and around the world.

Private property is the nucleus of capitalism, of course, so the plan to legitimize it here in a country of slogans like “socialism or death” strikes many Cubans as jaw-dropping. Indeed, most people expect onerous regulations and, already, the plan outlined by the state media would suppress the market by limiting Cubans to one home or apartment and requiring full-time residency.

Yet even with some state control, experts say, property sales could transform Cuba more than any of the economic reforms announced by President Raul Castro’s government. Compared with the changes already passed (more self-employment and cellphone ownership) or proposed (car sales and looser emigration rules), “nothing is as big as this,” said Philip Peters, an analyst with the Lexington Institute.

—Damien Cave, The New York Times

Drugs don’t ease vets’ post-traumatic stress, study finds

Drugs widely prescribed to treat severe post-traumatic stress symptoms for veterans are no more effective than placebos and come with serious side effects, including weight gain and fatigue, researchers reported on Tuesday.

The surprising finding, from the largest study of its kind in veterans, challenges current treatment standards so directly that it could alter practice soon among doctors treating returning military personnel, some experts said.

Ten percent to 20 percent of those who see heavy combat develop lasting symptoms of post-traumatic stress disorder, and about a fifth of those who get treatment receive a prescription for a so-called antipsychotic medication, according to government numbers.

The new study, published in the Journal of the American Medical Association, focused on one such medication, Risperdal. But experts said that its results most likely extend to the entire class, including drugs like Seroquel, Geodon and Abilify.

—Benedict Carey, The New York Times

Markets plunge amid storm of bad news

As the debt-limit drama ended in Washington on Tuesday, storm clouds thickened in the financial markets.

The broader U.S. stock market dropped 2.6 percent, erasing all of its gains for the year. That capped a string of declines over seven consecutive days, its longest losing streak since October 2008.

Fears of a sovereign default in either Italy or Spain re-emerged, and the interest rates on those countries’ bonds soared. U.S. Treasury yields fell sharply to their lowest level in nearly a year as investors fled to the safety of American assets but also fretted over sclerotic economic growth. Gold, seen as another safe haven, leapt to a record high.

European markets kicked off the descent and the United States soon followed, despite Senate approval of an agreement to lift the debt ceiling and cut more than $2 trillion from federal spending.

The markets and the breaking of the budget impasse have been overwhelmed by bad economic news and the chances of more. Market analysts and economists made clear that even though the debt-limit agreement averted a potential default on U.S. debt, the drawn-out process had taken its toll.

Recent economic data is already weak, said Stanley Nabi, the chief strategist for Silvercrest Asset Management Group, noting the GDP revisions on Friday that indicated the recession was deeper and the recovery more fragile than originally thought. On Tuesday, the Commerce Department said personal spending fell 0.2 percent in June, the first time it has declined since September 2009. And now that the debt-ceiling deal has offered up the prospect of lower spending from the government, Nabi said, “Who is going to drive the economy?”

—Christine Hauser, The New York Times