Spending cuts seem here to stay

WASHINGTON — The spending cuts are here to stay if you believe the public posturing Sunday.

The Senate's Republican leader Mitch McConnell called them modest. House Speaker John Boehner isn't sure the cuts will hurt the economy. The White House's top economic adviser, Gene Sperling, said the pain isn't that bad right now.

So after months of dire warnings, Washington didn't implode, government didn't shut down and the $85 billion budget trigger didn't spell doom. And no one has yet crafted a politically viable way to roll back those cuts.

"This modest reduction of 2.4 percent in spending over the next six months is a little more than the average American experienced just two months ago, when their own pay went down when the payroll tax holiday expired," McConnell said.

"I don't know whether it's going to hurt the economy or not," Boehner said. "I don't think anyone quite understands how the sequester is really going to work."

And Sperling, making the rounds on the Sunday news shows, added: "On Day One, it will not be as harmful as it will be over time."

Both parties cast blame on the other for the automatic, across-the-board spending cuts but gave little guidance on what to expect in the coming weeks. Republicans and Democrats pledged to retroactively undo the cuts but signaled no hints as to how that process would start to take shape. Republicans insisted there would be no new taxes and Democrats refused to talk about any bargain without them.

"That's not going to work," said Sen. Kelly Ayotte, R-N.H. "If we're going to increase revenue again, it's got to go to the debt with real entitlement reform and real tax reform when you actually lower rates. ... I'm not going to agree to any more tax increases that are going to go to increase more government."

Sen. Lindsey Graham, R-S.C., said any tax increases were unacceptable.

"I'm not going to do any more small deals. I'm not going to raise taxes to fix sequestration. We don't need to raise taxes to fund the government," Graham said.

All of this comes ahead of a new, March 27 deadline that could spell a government shutdown and a debt-ceiling clash coming in May.

Boehner said his chamber would move this week to pass a measure to keep government open through Sept. 30. McConnell said a government shutdown was unlikely to come from his side of Capitol Hill. The White House said it would dodge the shutdown and roll back the cuts, which hit domestic and defense spending in equal share.

"We will still be committed to trying to find Republicans and Democrats that will work on a bipartisan compromise to get rid of the sequester," Sperling said.

Senate Democrats and Senate Republicans last week put forward alternatives that would have avoided the cuts, but each side voted down the others' proposals. The House Democrats proposed an alternative but the House Republicans did not let them vote on it.

House Republicans twice passed alternatives last year.

Obama has phoned lawmakers but it isn't clear to what end; the White House refused Sunday to release the names of lawmakers Obama phoned. Boehner and McConnell said they had a productive meeting with Obama on Friday, but it didn't yield a deal.

"Well, no one can think that that's been a success for the president," said Mitt Romney, Obama's unsuccessful rival in November's election. "He didn't think the sequester would happen. It is happening."

Obama and the Republicans have been fighting over federal spending since the opposition party regained control of the House of Representatives in the 2010 midterm elections. The budget cuts were designed in 2011 to be so ruthless that both sides would be forced to find a better deal, but they haven't despite two years to find a compromise.

The $85 billion in cuts apply to the remainder of the 2013 fiscal year, which ends Sept. 30. But without a deal they will continue slashing government spending by about $1 trillion more over a 10-year period.

McConnell spoke to CNN's "State of the Union." Boehner was interviewed on NBC's "Meet the Press." Sperling appeared on ABC's "This Week," NBC and CNN. Ayotte appeared on ABC. Graham spoke with CBS' "Face the Nation." Romney was a guest on "Fox News Sunday."

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Mustering a new tenant for Navy Yard landmark

The Muster House — an unusual, octagonal building that served as a worker assembly point at the Charlestown Navy Yard in the 1800s — will have a new leasehold owner for the first time in more than 15 years.

The owner of a building consulting firm in Cambridge is finalizing a deal and may relocate his business to the 31 Fifth St. property, which has been owned by the Boston Redevelopment Authority since a 1970s handover by the federal government.

"From a community point of view, it's always good to see an active user in that building," said Mark Rosenshein of the Charlestown Neighborhood Council. "It's a very small and unique space, so it takes a very unique user to make it work."

Though tiny at less than 2,900 square feet and well off the Hub office market's beaten path, the Muster House drew the likes of dot-com darling Jeff Taylor. The Monster founder picked the historic pad for his Eons startup, working solo there for the first few weeks.

"An entrepreneur starts in a very lonely place," Taylor told Bloomberg News in 2006. "It's when you think you have a great idea and everyone around you thinks you're crazy, and you act on it."

Built between 1852 and 1854, the four-story brick building is surrounded by a porch and topped by a clock tower. Shipyard workers mustered daily at the sign, receiving assignments and pay. The landmark is down the street from the USS Constitution's berth.

The next tenant may be Building Enclosure Associates, whose owner, Michael Velji, is close to finalizing a purchase of the lease from the Royalston Trust.

Velji was not available for comment, but an executive at the firm, Ed Mannix, said a deal may be done later this month.

The Royalston Trust was set up by the late Werner Bundschuh, a filmmaker and local real estate developer who acquired the Muster House lease at a foreclosure auction in 1997. At the time, the trust assumed a 65-year lease with the BRA, paying about $4,300 a year and taking responsibility for renovations and maintenance.

"We actually had quite a bit of interest," said Nancy Kueny, a broker at Gibson Sotheby's International Realty handling the lease sale for the trust. "It's probably one of the most interesting buildings in the Navy Yard."

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The Ticker

What's up, online doc?

Rite Aid has expanded an online doctor service for its drugstore customers that is limited to virtual visits, but cheaper than a traditional primary care appointment.

The company, the nation's third-largest drugstore operator with 4,600 U.S. stores, said its NowClinic Online Care program is available at 58 locations in four cities: Baltimore, Boston, Philadelphia and Pittsburgh. Its rivals, Walgreen and CVS, also run in-store clinic programs. Walgreen operates more than 370 Take Care clinics, while CVS runs more than 600 MinuteClinics.

Rite Aid's service connects drugstore customers with doctors for a video or phone consultation about a range of ailments like allergies, bronchitis, rashes, the flu or sinus infections. Rite Aid officials say the concept aims to improve access to health care.

TODAY

• At a community meeting in South Boston, developers discuss plans to demolish St. Augustine's Church and build a residential complex.
• Men's Wearhouse reports quarterly financial earnings.

TOMORROW

• The Harvard Allston Task Force meets at the Honan-Allston library branch.
• The Institute for Supply Management Index releases its service sector index for February.

WEDNESDAY

• Framingham office supplier Staples reports quarterly financial results.
• The Federal Reserve releases the "Beige Book" report on regional economic conditions.

THURSDAY

• The Greater Boston Chamber of Commerce hosts a government affairs forum featuring House Speaker Robert DeLeo, at Boston Park Plaza.
• Massachusetts jobs figures for January and revised 2012 unemployment rate, labor force data and jobs estimates are released.
• The Federal Reserve releases consumer credit data for January.

FRIDAY

• U.S. Labor Department releases the unemployment report for February.
• Rockland Trust has appointed Brian Slater to the bank's commercial lending team as vice president. Prior to joining the bank, Slater served as senior vice president and team leader at People's United Bank.
• Blueprint Medicines of Cambridge has added Dr. David Schenkein, chief executive officer of Agios Pharmaceuticals, to its board of directors.

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Media Google-y eyed over glasses idea

If you've paid any attention to technology-related news recently, you might think that by the end of the year we'll all be like Tom Cruise in "Minority Report," sporting retina-scanning glasses with a gestural interface in the form of Google's Project Glass.

But what's lost in all the media fawning is that Google actually has produced something between a really cool virtual tour-guide and a hands-free smartphone. Not quite the augmented reality game-changer that is being portrayed. For now.

Google, or specifically co-founder Sergey Brin, has done a masterful job of marketing a fantasy, tapping into our collective craving for the next game-changing device. The company has not only driven its stock price to an all-time high, but also crowd-sourced the vision for whatever eventually becomes of Project Glass.

But the hype may have gotten out of hand recently. A few days ago, Brin was actually downplaying expectations: "It's by no means a done deal yet," he said, adding that we shouldn't trust purported prototypes that show up on eBay.

The interesting psychology of Google's strategy aside, the fact is that some sort of glasses will become available to some segment of consumers soon — for about $1,500. The few who have tested this device report that in a controlled environment for a short period of time under certain circumstances, Google's glasses can take videos and photos, forecast the weather, receive email and relay directions — provided there's a cellphone to connect with.

Though I'm as psyched as anyone to get my hands on these things, whatever they are, I predict that Google's glasses will compete directly with another product that requires a smartphone to work, and that it won't win. Apple's rumored iWatch will wear more discreetly, and it will be cheaper, too.

I predict the glasses will have the battery life of a first-generation smartphone and will be similar to Segways — the province of mall cops, group tours and the eccentric rich, but another novelty cast aside by the mainstream.

Even if Google fully achieves its vision, there's still the giant impediment of getting people comfortable with the idea of looking and sounding silly, talking to oversized bifocals as they walk.

But don't misunderstand: I'd love to get a pair. So Google ... if you're reading this ... can I expect my review glasses soon?

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Evernote hacked: 50 million passwords reset

LONDON — Online note-taking service Evernote Corp. has been hacked and is resetting all its 50 million users' passwords as a precaution.

The Redwood City, California-based company said in a post published late Saturday that an attacker had been able to access sensitive customer information and that every user would have their account reset "in an abundance of caution." In a follow-up email sent Sunday, the company said it believed the attack "follows a similar pattern of the many high profile attacks on other internet-based companies that have taken place over the last several weeks" — an apparent reference of recent breaches at Facebook Inc., Twitter Inc., and Apple Inc.

However the company said the attack did not appear to be linked to Java, a commonly used computer programming language whose weaknesses have been used as springboards for other recent hacks.

Evernote said the attack, which it described as "sophisticated," was able to compromise an unspecified number of customers' encrypted passwords. Decoding such passwords can be difficult but possible.

The company said it has seen no evidence that any customer data had been tampered with or that any payment information had been compromised.

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Boston’s Pongr gains Sightec

A new technology deal inked with Israeli startup Sightec has Hub-based 
Pongr thinking about the big picture.

The mobile photo marketing company said its "significant" acquisition of Sightec's super-resolution software will help Pongr pinpoint harder-to-find brands and products in photos consumers take across social networks, thereby offering advertisers more marketing opportunities.

"We think we've gotten really good at how to do direct response photo marketing for brands. This is about scaling it up and doing it through these other networks," Pongr CEO Jamie Thompson, 32, told the Herald. "We needed some robust technology in order to do that."

Thompson said Sightec's technology can improve image quality 10 times over typical image enhancement results, and detect people and objects within pictures regardless of whether they are in the foreground or background.

"If it's a birthday party, and you take a picture of your wife or loved one celebrating their birthday and there happens to be Mountain Dew on the table, we want to know that Mountain Dew is part of that birthday celebration," he said. "It's very, very hard to analyze billions and billions of photos looking for items, or objects, or things, or people that might be of interest to advertisers because consumers may not necessarily be tagging them."

Founded in 2008, Pongr asks consumers to use their mobile phone cameras to snap shots of outdoor billboards, bus stop advertisements, products and magazine pages in return for rewards that are messaged back to their phones. The company has previously done major promotional campaigns with brands like Pepsi, Mountain Dew and Frito-Lay.

The company will keep Sightec's scientific team in Tel Aviv for now, with plans to add more scientists and engineers in the Israeli city as part of the "all-stock deal," Thompson said.

Thompson added that Sightec's technology, when applied to the Pongr platform, has greater ability to match mobile and desktop ads with the contextual relevance of photos consumers take with their mobile devices and share across networks such as Facebook, Twitter, Instagram, Pinterest and Tumblr.

"As we stand now on the tip of the iceberg of a new era of user-generated visual content, we think visual content needs to be matched up better to how the Internet is monetized," he said. "If advertisers can't take advantage of this content, then the money they spend on ads is not as relevant as it could be."

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Thousands march in Portugal to protest austerity

LISBON, Portugal — Many thousands of demonstrators held marches in more than 20 cities in Portugal on Saturday to protest against government-imposed austerity measures aimed at lifting the ailing country out of recession.

Tens of thousands of people filled a Lisbon boulevard leading to the Finance Ministry carrying placards saying "Screw the troika, we want our lives back." The troika is a reference to the European Commission, the International Monetary Fund and the European Central Bank, the lenders behind the country's financial bailout.

Many protesters were singing a 40-year-old song linked to a 1974 popular uprising known as the Carnation Revolution. Some waved handkerchiefs in a symbolic gesture, saying goodbye to the government.

"If the government pays attention to what is happening and understands that the people are against them, they should get out," said Serafin Lobato, 65. "If not, this won't stop."

Portugal is expected to endure a third straight year of recession in 2013, with a 2 percent contraction. The overall jobless rate has grown to a record 17.6 percent.

The marches were powered mostly by young people. Unemployment among people under 25 is close to 40 percent.

The country's largest trade union, the General Confederation of Portuguese Workers, with some 600,000 members, also supported the marches and swelled numbers.

After several years of tax increases and welfare cuts, austerity is poised to deepen as the government looks for another €4 billion ($5.2 billion) to cut over the next two years, with the national health service, education, pensioners and government workers likely to be the hardest hit.

"There is no future without education, there is no future without culture," said student Ana Julia, 23. "We have to protest to get back what they are trying to take away from us."

The government is locked into debt-cutting measures in return for the €78 billion ($102 billion) financial rescue set up in 2011. More tax hikes this year sliced another chunk off wages.

___

Associated Press writer Harold Heckle in Madrid contributed to this report.

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AP: NY fracking held as Cuomo, RFK Jr. talk health

AP: NY fracking held as Cuomo, RFK Jr. talk health

ALBANY, N.Y. — New York Gov. Andrew Cuomo came as close as he ever has to approving fracking last month, laying out a limited drilling plan for as many as 40 gas wells before changing course to await the findings of a new study after discussions with environmentalist and former brother-in-law Robert F. Kennedy Jr., several people familiar with his thinking told The Associated Press.

The turning point, which could delay a decision for up to a year or longer, came in a series of phone calls with Kennedy. The two discussed a new health study on the hydraulic fracturing drilling method that could be thorough enough to trump all others in a debate that has split New York for five years.

"I think the issue suddenly got simple for him," Kennedy told the AP, then went on to paraphrase Cuomo in their discussions: "'If it's causing health problems, I really don't want it in New York state. And if it's not causing health problems, we should figure out a way we can do it.'"

Kennedy and two other people close to Cuomo, who spoke to the AP only on condition of anonymity because Cuomo is carefully guarding his discussions on the issue, confirmed the outlines of the plan the governor was considering to allow 10 to 40 test wells in economically depressed southern New York towns that want drilling and the jobs it promises. The plan would allow the wells to operate under intense monitoring by the state to see if fracking should continue or expand.

They all said it was the closest Cuomo has come in his two years in office to making a decision on whether to green-light drilling.

The state has had a moratorium on the process since 2008 while other states in the gas-rich Marcellus Shale formation, such as Pennsylvania, have seen local economies boom as drilling rigs have sprouted up.

Cuomo issued a brief statement Saturday through a spokesman saying that the state departments of environmental conservation and health are "in the process of making a determination with respect to the safety and health impacts of fracking.

"After, and only after, they conclude their work will the state's position be determined — it's that simple and it hasn't and doesn't change with any conversations," Cuomo spokesman Josh Vlasto said.

The governor continues to refuse to talk about his internal process and wouldn't comment directly for this story. He has been repeating the phrase he's used for two years, that "science, not politics" will rule.

Kennedy, brother of Cuomo's ex-wife, Kerry, described a governor who is intensely involved in the emotion-charged issue, which Cuomo privately likened to taking on the National Rifle Association over gun control laws. Kennedy said Cuomo reached out personally to many others as well in his evaluation.

Kennedy believes Cuomo held off in large part because of the prospect of a new $1 million study by the Geisinger Health System of Pennsylvania, billed by property owners seeking safe fracking and environmentalists as a "large-scale, scientifically rigorous assessment" of drilling in Pennsylvania.

The study will look at detailed health histories of hundreds of thousands of patients who live near wells and other facilities that are producing natural gas from the same Marcellus Shale formation that New York would tap.

Unlike most studies funded by advocates or opponents of hydrofracking, this study would be funded by the Sunbury, Pa.-based Degenstein Foundation, which is not seen as having an ideological bent.

"I think it will be pivotal," Kennedy said. Preliminary results are expected within the year, but there is no specific timetable and final results could be years off. Kennedy is opposed to fracking unless it can be proven to be safe for the environment and public. He said he's unsure what the Geisinger report will conclude.

The research and education arm of the Independent Petroleum Association of America cried foul at the private conversations of the powerful public figures.

"This is pretty outrageous, above and beyond the four-year charade that's already occurred," said Steve Everley of Energy in Depth. "The governor has insisted publicly that his review of hydraulic fracturing will be based on science, and yet he's actually making decisions about New York's future based on backroom conversations with a Kennedy.

"Maybe if Governor Cuomo had been as interested in speaking with other regulators as he was in speaking with his former brother-in-law, he would have recognized that shale development can be and is being done safely, and folks struggling to find work upstate might actually have jobs," Everley said.

Dan Fitzsimmons, leader of the Joint Landowners Coalition of New York, a pro-drilling group, said opposition to hydrofracking is based on politics, not science.

"Delay, delay delay, that's been the name of the game with these folks, and the sad thing about Cuomo is that he's allowing it," Fitzsimmons said. "How long are you going to throw away taxpayer dollars over politics?"

But Adrian Kuzminski, a fracking opponent with the group Sustainable Otsego, said he fears that the test wells Cuomo has been considering would be "a stalking horse" for more drilling.

"After a couple of years they're going to say 'Oh, we don't see any problems,'" Kuzminski said. "There's no need for test wells in New York state. The information is just out there."

Shortly after the conversations with Kennedy in early February, Cuomo's health commissioner, Dr. Nirav Shah, mentioned the Geisinger study among three health reviews still pending and which could enter into Cuomo's decision. Shah, a nationally respected public health figure, was an associate investigator at the Geisinger Center for Health Research before going to work for Cuomo.

Sandra Steingraber, a biologist and founder of New Yorkers Against Fracking, said Saturday, "As Health Commissioner Shah said, the right time to study fracking is before fracking begins. We expect that Governor Cuomo will listen to scientists and medical experts and let evidence dictate whether or not to lift our state's moratorium, and we further expect that he will wait for national studies and a real New York-specific study."

Cuomo, a popular Democrat who supporters say may run for president in 2016, is getting criticism from both sides over his delayed decision and calls for more studies. Landowners and industry say they're missing out on an economic boom while environmentalists say the administration should have ordered a full health study and has been too opaque about the regulatory process.

Some pundits have questioned whether Cuomo was "becoming Hamlet on the Shale," echoing a reference to criticism of his father, former Gov. Mario Cuomo, who spent politically damaging months as "Hamlet on the Hudson" publicly debating whether to run for president. It's a characterization Kennedy rejects.

Many federal and state regulators say hydraulic fracturing, which injects a mix of water and chemicals thousands of feet underground to crack open shale and release natural gas, is safe when done properly and thousands of sites have few complaints of pollution. But environmental groups and some doctors say regulations still aren't stringent enough and the practice can pollute ground water. The Marcellus Shale lies under parts of New York, Pennsylvania, Ohio and West Virginia.

"What's interesting is Andrew is trying to figure this out," Kennedy said. "It's interesting to see this ... that usually doesn't happen. (Most governors) take a poll, or they take industry money and just do it ... but I think this is the harder route."

___

Associated Press Writer Karen Matthews contributed to this report from New York City.

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Burlington's apples shine

Burlington High School, which gives every student an iPad to keep until graduation, has become a poster child for tech giant Apple.

The company will present staff and students with the Apple Distinguished School award on March 13 and laud the school's efforts to transform classroom learning through the company's technology on its website.

"It's nice for the staff and students to be recognized," Principal Mark Sullivan said yesterday. "This is our second full year using the iPad, and I think the biggest measure of success is that it's helped our kids become more creative and engaged in their classrooms."

Using different apps, students in psychology class, for example, are able to see a 3-D image showing each part of the human brain on their iPads, while students in anatomy class are able to see an image of a cat's anatomy. Teachers post homework on their blogs, and students, who have the option of buying the iPad at market price when they graduate, are able to compile curated portfolios of their writing or artwork that they can present to colleges or to employers in the future.

Dylan Smith, a 16-year-old junior, writes papers on his iPad, while Adriana Berardi, one of his classmates, takes notes on it.

"There is game-playing, but people are pretty disciplined with them," Smith said. "I honestly thought a lot of the teachers would not know how to use them, but it's worked out."

To help anyone who has a problem, the high school has designated its own version of Apple's "Genius Bar," staffed by a teacher and a handful of students each period, as part of a course for which they earn credit.

In all, more than 2,000 Burlington students have iPads at their disposal. In addition to high schoolers, there's one for every student in grades six through eight at Marshall Simonds Middle School; one first grade class in each of the town's four elementary schools; and every fourth and fifth grader at Pine Glen Elementary School, said Assistant Superintendent Patrick Larkin.

Even though elementary and middle school students can't take the devices home, the virtual blackboards are helping first-graders spell out words and increase their journal writing output, Larkin said, while older students are becoming better organized through apps like Explain Everything, Evernote and Genius Scan.

"We're supposed to be preparation for the real world, so what's going on in here should look like the real world," Larkin said. "We're getting our kids comfortable with resources they can use, no matter what device they're on. That's been a big focus for us."

Burlington schools pay for the iPads over a three-year period through an Apple equity lease program, he said, and their goal is to have one for every student in the district within two years. To date, Apple has sold more than 4.5 million iPads to U.S. schools.

Students are currently using the iPad 2, but school officials may invest in updated IPad models or iPad Mini, Larkin said.

"The thing we need to be clear on is we do have to monitor kids' screen time when they have their face in a device," Larkin said, adding the school district holds monthly "parent technology nights" to address any concerns parents may have over excessive technology use. "Obviously we still want to teach the social skills we've always taught."

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Tax bills for rich families approach 30-year high

WASHINGTON — Washington is gridlocked again over whether to raise taxes on the rich.

But it turns out that wealthy families already are paying some of their biggest federal tax bills in decades, even as the rest of the population continues to pay at historically low rates.

A new analysis shows that average tax bills for high-income families rarely have been higher since the Congressional Budget Office began tracking the data in 1979.

It's the middle- and low-income families who aren't paying as much as they used to.

Liberals say rich families can afford to pay higher taxes because their incomes have grown much more than incomes for middle- and low-income families.

Conservatives say raising taxes on the wealthy would reduce their incentive to save and invest, hurting long-term economic growth.

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