G.O.P. Yields on Fiscal Point, Clearing Way for More Talks

In seesaw negotiations, the two sides got closer on the central issue of how to define the wealthy taxpayers who would be required to pay more once the Bush-era tax cuts expire.

But that progress was overshadowed by gamesmanship. After Republicans demanded that any deal must include a new way of calculating inflation that would mean smaller increases in payments to beneficiaries of programs like Social Security, Democrats halted the negotiations for much of the day.

The Republican leader in the Senate, Mitch McConnell, made an emergency call to Mr. Biden in hopes of restarting negotiations, and the White House sent the president’s chief legislative negotiator to the Capitol to meet with Senate Democrats. Soon after, Republicans withdrew their demand and discussions resumed, but little progress was made.

Lawmakers will be back on Monday. Senator Harry Reid of Nevada, the majority leader, said the Senate would return at 11 a.m. Monday and then left the Capitol just after 6 p.m. “Talk to Joe Biden and McConnell,” Mr. Reid told reporters when asked if negotiations were continuing.

In the balance are more than a half-trillion dollars in tax increases on virtually every working American and across-the-board spending cuts that are scheduled to begin Tuesday. Taken together, they threaten to push the economy back into recession.

“It looks awful,” said Senator Richard J. Durbin of Illinois, the second-ranking Democrat. “I’m sure the American people are saying, with so much at stake why are they waiting so late to get this done?”

Senator Lindsey Graham, Republican of South Carolina, who had said early Sunday that he thought a deal was within reach, said later on his Twitter feed, “I think we’re going over the cliff.”

Weeks of negotiations between President Obama and Speaker John A. Boehner inched toward a deal to avert the so-called fiscal cliff, while locking in trillions of dollars in deficit reduction over 10 years and starting an effort to overhaul the tax code and entitlement programs like Medicare. But earlier this month, Mr. Boehner walked away from those talks.

Instead he tried to reach a much more modest deal to avoid a fiscal crisis by extending the expiring tax cuts for incomes under $1 million. When Mr. Boehner’s own Republican members revolted, he ceded negotiations to the Senate. But compromise has proved equally elusive in that chamber.

Absent a last-minute deal, Mr. Reid is expected to move on Monday to bring to a vote a stopgap measure pushed by Mr. Obama, which would retain lower tax rates for incomes below $250,000 and extend unemployment benefits. But it was not clear that would even get a vote. The objection of a single senator on Monday would run out the clock on the 112th Congress before a final tally could be taken.

Mr. Obama appeared on the NBC program “Meet the Press” on Sunday and implored Congress to act. “We have been talking to the Republicans ever since the election was over,” Mr. Obama said in the interview. “They have had trouble saying yes to a number of repeated offers.”

He added, “Now the pressure’s on Congress to produce.”

After the talks broke down over the inflation demand, Senate Republicans emerged from a closed-door meeting on Sunday afternoon to declare the issue off the table for now. Senator John McCain, Republican of Arizona, said that holding the line against raising taxes on high-income households while fighting for cuts to Social Security was “not a winning hand.”

Then they mustered a new talking point, saying Democrats want to raise taxes only to spend more money. Their new objection: Democrats are seeking a one- to two-year “pause” for across-the-board spending cuts and an extension of expired unemployment benefits for two million people.

“We raise taxes, and we spend more?” asked Senator Kay Bailey Hutchison, Republican of Texas. “It’s business as usual.”

For their part, Democrats beat back the inflation proposal, and then promptly proclaimed themselves incensed that Republicans would not soften their position on a generous level of taxation on inherited estates and an insistence that a final deal permanently prevent the alternative minimum tax, a parallel tax system meant to ensure that wealthy people pay more, from expanding to affect more of the middle class.

Democrats were also demanding that across-the-board cuts to military and domestic programs — known as the “sequester” — at least be delayed.

Robert Pear and John M. Broder contributed reporting.

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Tepid Sales of Microsoft’s Windows 8 Point to Shaky Market

Not this time. Windows 8, the latest edition of Microsoft’s software, failed to pack shoppers into a Microsoft store in a mall here last week, at a time when parking lots in the area were overflowing. The trickle of shopping bags leaving the store with merchandise was nothing like the steady stream at a bustling Apple store upstairs.

Claude Ballard was among the customers at the Microsoft store who tried out Surface, a new Microsoft-designed Windows tablet. Mr. Ballard, who described himself as a “semiretired” computer systems manager for a real estate firm, said he was intrigued by the eye-catching design of Windows 8 — but not enough to scrimp to buy a new computer this year.

“It’s economics, really,” he said. “It’s going to be a better year for my mechanic than it is for me.”

Weak PC sales this holiday season suggest that the struggles of Microsoft and other companies that depend heavily on the computer business will not abate soon. Plenty of consumers already own PCs and seem content to make do with what they have, especially in a shaky economy in which less expensive mobile devices are bidding for a share of their wallets.

While there are also many tablets running Microsoft’s new, touch-friendly Windows, they have so far failed to emerge from the shadow of competing products from Apple and Amazon and other devices that are being snapped up by holiday shoppers.

Emmanuel Fromont, president of the Americas division of Acer, the world’s No. 4 PC maker, said sales of the company’s Windows 8 PCs had been lower than expected. He said one factor was the system’s unfamiliar design, which appeared to be making consumers cautious.

“There was not a huge spark in the market,” Mr. Fromont said. “It’s a slow start, there’s no question.”

The clearest evidence of Windows 8’s disappointing introduction comes from the research firm NPD, which estimates that sales of Windows machines have actually dropped from a year ago.

According to NPD, stores in the United States sold 13 percent fewer Windows devices from late October, when Windows 8 made its debut, through the first week in December, than in the same period last year.

Those figures do not include sales in Microsoft’s own stores, which were the only place to buy a Surface tablet during that period, but because the stores are scarce, analysts believe it is unlikely they made a big difference.

“I think everybody would have hoped for a better start,” said Stephen Baker, an analyst at NPD. “The thing is, this market is not the same market that Windows 7 or Vista or even XP launched into.”

Those earlier versions of Windows all came out during periods when the PC’s status as the center of computing seemed far more secure. In the intervening years, smartphones and tablets have become much more serious rivals for a share of consumer spending on technology. Sales of PCs have been declining for much of the year.

While most people are not getting rid of their PCs altogether in favor of mobile devices, analysts believe they are postponing purchases of new ones.

“What you’re seeing is not a retirement of PCs, but a push-out in the replacement cycle,” said A. M. Sacconaghi, an analyst at Sanford C. Bernstein. “If people used to buy PCs every four years and are now buying them every five years, that could lower PC sales by 20 percent over time. That’s substantial.”

Mr. Sacconaghi predicted that global PC shipments would be down 3 percent in 2012.

The shift in spending to tablets is one reason that Windows 8 is so critical for Microsoft’s future. The company overhauled its operating system with a radically different, tile-based interface that is easier to navigate on touch-screen devices. Microsoft intends the software to be flexible enough that it can still be used on conventional laptops and desktops, including newer models with touch screens.

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Breezy Point, Battered Seaside Haven, Recalls Its Trial by Fire

On the night Hurricane Sandy hit, two dozen members of the Point Breeze Volunteer Fire Department congregated in their snug firehouse in Breezy Point, Queens, not far from Jamaica Bay. It is a compact colony of 2,837 homes that undulates along the western tip of the Rockaway Peninsula, cradled between the bay and the Atlantic Ocean.

About 6:30 p.m., two turkeys beckoned on the table. The crew members barely savored a swallow when water lashed at their knees. Forsaking dinner, they scattered to the Clubhouse, a humble community center behind the firehouse that was several feet higher. A few residents had found sanctuary there. Homes were flooding and being hacked apart. The Sugar Bowl, a favorite bar, disappeared. Before long, water infiltrated the Clubhouse.

Through the windows, the firefighters glimpsed the orange glow of a fire in the dark maw of the night. There was little rain. The water was four feet deep, bearing waves and wicked currents. “It was like the ocean was outside,” said Kevin Hernandez, 21, another volunteer firefighter. “The wind was 80 miles an hour.”

It was impossible to reach the fire. They stared at the very menace they were committed to conquering, watching it strengthen, and could do nothing. On a night not meant for humankind, they could not help but wonder if they stood on death’s doorstep.

It was about then that they began praying.

Among the many cruelties delivered by Hurricane Sandy, the Breezy Point fire has inscribed itself as one of the storm’s hellish signatures. Ranking with the worst residential fires in New York City’s history, it burned down 126 homes and damaged 22 more, leaving a conspicuous hole in the heart of this genial shore community. The storm hit Oct. 29 and about two months later, the neighborhood remains a cindery reminder of what it had once been.

In all, the New York City Fire Department counted 94 fires related to the storm. Nothing, though, approached the monster that visited Breezy Point. The Fire Department has not yet finished its investigation into the blaze. However, Robert Byrnes, the chief fire marshal, said that it had concluded that floodwaters caused something electrical, like a socket or breaker panel, to short and ignite inside the unoccupied house at 173 Ocean Avenue, random as the spin of a wheel.

Breezy Point’s residents know grief, 30 people connected to the community having perished in the Sept. 11 attacks. Yet the miracle of the torrid fire is that no one died or was seriously injured. The fire chose property and spared life.

A Threatening Light

The man unnervingly close to its origin, who saw it all, had been sleeping. Glenn Serafin, 62, is a media broker who lives in Tampa, Fla. But an 80th birthday party for his aunt in Totowa, N.J., on the Saturday before the storm, brought him north. After the party he and his wife, Josephine, drove to the two-story clapboard house they have owned for nine years in Breezy Point.

It stood on Atlantic Walk in the area known as the Wedge, implying its tapered shape, where houses practically overlap. Streets do not exist in the Wedge, only sidewalks and sand alleys for sanitation trucks and emergency vehicles. Those who live there leave their cars in common parking lots and transport their belongings in little wagons.

Long nicknamed the Irish Riviera, even as its population has become more ethnically diverse, Breezy Point is predominantly middle class and working class, home to numerous firefighters and police officers. Houses, some newer ones that stand with a certain hauteur and older ones dating back 70 or 80 years, are often passed down generations. It is a gated community, with its own security force, and residents belong to a cooperative association that owns the land. Originally the neighborhood was a summer retreat, but now its full-time population has swelled to over 60 percent. Not everyone holds flood insurance.

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