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“If they could get this fixed,the economy is poised to takeoff,” Bank of America Corp. ChiefExecutive Brian Moynihan said inan interview.

President Barack Obama ismeeting Friday with congressio-nal leaders to discuss the se-quester. If, as expected, they findno way to avoid it, Mr. Obamawill sign an order directing gov-ernment agencies to begin imple-menting the cuts.

On Thursday, Congress contin-ued its sink into partisanmud. The

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fiscal matters, lowered even fur-ther the public’s estimation ofthe capital’s leaders and raisedconsumer fears about the econ-omy, according to polls.

In the eyes of many budgetexperts, though, it is doingsomething worse: By focusing ona proportionally small level ofspending, the sequester fight isdistracting attention from lon-ger-term deficit issues that needto be addressed.

Even cuts that have some bi-partisan support, such as limit-ing the growth of future SocialSecurity benefits or ending farmsubsidies, have been shelvedamid the brinkmanship.

The federal government entersa controversial new phase of defi-cit cutting Friday, as an automatictrigger begins slicing budgets insome areas while leaving pro-grams such asMedicare andMed-icaid—among the largest driversof future debt—largely untouched.

The $85 billion in so-calledsequester cuts push Washington,and the nation’s economy, intouncertain waters. The debateover the across-the-board reduc-tions has added to the already-high level of acrimony betweenDemocrats and Republicans on

will simply be a pilgrim on thelast stop of my pilgrimage on thisearth.”

The pope departed VaticanCity in dramatic fashion, whiskedby a white helicopter over thesun-kissed dome of St. Peter’s ba-silica. At the striking of 8 p.m.,the official hour of the papacy’send, Church officials sealed thepapal apartments and elevator.The papal ring, which bears theimage of St. Peter as a fishermanand the seal of his authority, wasbroken. Bells tolled.

“How do you invent a ritualfor the pope leaving the Vaticanand the pope leaving office?That’s new for us. But it had tohappen,” said Rev. JeremyDriscoll, a theologian at the Pon-tifical Athenaeum Sant’Anselmoin Rome.

Stefania Miscoli, a 50-year-oldPleaseturntopageA8

“You know this day is differentthan my previous days,” a smilingBenedict XVI told a crowd gath-ered before the facade of the pa-pal summer residence in the me-dieval town of Castel Gandolfo. “I

CASTEL GANDOLFO, Italy—Forthe first time in the past six cen-turies of Roman Catholicism, apope appeared at his balcony—high above the throng—not togreet the faithful, but to bid themfarewell.

Benedict XVI renounced his of-fice as supreme pontiff of theCatholic fold on Thursday, takinga step that few popes have daredin the 2,000-year life of theChurch. His departure was char-acteristic of a man who thoughtin terms of centuries, but whosepapacy was often swept up in thetumult of daily headlines.

Now, attention shifts to thecardinals who will forge Catholi-cism’s future through one of itsoldest traditions: a secret con-clave to elect a new leader.

CONTENTSCorporate News... B2-5Global Finance............ C3Heard on Street........ C8In the Markets........... C4Music................................ D5Market Data................ C5

Movies......................... D3,4Opinion................... A11-13Sports........................... D10Technology.................... B6U.S. News................. A2-6Weather Watch........ B8World News..... A7-9,14

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Vital Signs

The nation’s economygrew 2.2% in 2012, thanks tospending by consumers andbusinesses. Governmentcontinued to be a drag ongrowth, although less lastyear than it was in 2011. Forthe past year, spending andinvestment by federal, stateand local government sub-tracted 0.34 percentagepoint from inflation-ad-justed growth of gross do-mestic product. A2

Government share of GDPgrowth, in percentage points

Source: Commerce Department

'09 '10 '11 '12’08’07’06–1.0

–0.5

0

0.5

>

Americans late last yeartook on more debt for

the first time since thethroes of the recession, asign that consumers are feel-ing more comfortable bor-rowing after years of cuttingdebt to fix their finances. A2n Groupon fired CEO An-drew Mason a day after re-porting a worse-than-ex-pected loss that heightenedscrutiny of the daily-dealscompany’s business model. A1n Best Buy has ended talkswith founder Richard Schulzeover a deal in which he and agroup of buyout firms wereproposing to take a minoritystake in the company. B3n Freddie Mac, buoyed bythe housing market’s re-bound, posted an $11 billionprofit for 2012, its first prof-itable year since 2006. A2n Libya’s sovereign-wealthfund said it is cooperating withthe SEC in a probe into Gold-man’s dealings with the fundwhen Gadhafi was in power. C1n Apple last month imple-mented a new rule that exec-utive officers must hold tri-ple their base salary in thetech company’s stock. B2n Blue chips charged towithin striking distance oftheir record, but pulled backin late trading. The Dow fell20.88 points to 14054.49. C4nMexico’s political partiesare negotiating constitutionaloverhauls to boost competi-tion in the country’s telephoneand television markets. A9n Europe’s largest telecomoperators are in a standoffwith antitrust officials overhow to consolidate their hy-percompetitive industry. B1n Some big U.S. banks wereon pace to find a higher rateof foreclosure mistakes thanregulators had disclosed whenthey halted a review in favorof a $9.3 billion settlement. C1n Losses ballooned at Barnes& Noble’s Nook digital busi-ness, signaling that it is fall-ing further behind Amazon andApple in the tablet wars. B3n RBS will float part of itsU.S.-based Citizens unit andfurther shrink its investmentbank, responding to calls bythe British government. C1n A former head of a MasseyEnergy subsidiary pleadedguilty to conspiracy and allegedhe was ordered by the MasseyCEO at the time to illegallywarn of safety inspections. A2n Hospitals and insurersare locking horns in talks overthe new health-insuranceplans that will be sold underthe federal health law. B1nAOL’s operating chief, ArtieMinson, plans to leave by year-end amid a revamp that elimi-nates his post and will bring inmedia veteran Susan Lyne. B3n Herbalife agreed to nametwo of Icahn’s designees toits board, winning new sup-port in its battle with an-other hedge fund manager. B2

nThe U.S. unveiled a packageof aid to Syria’s opposition.A conference in Rome endedwith a pledge by Kerry toprovide food and medicalsupplies directly to rebelfighters, a narrow shift thatfell short of a commitment toprovide weapons. Syrian reb-els fighting the Assad regimeimmediately blasted themove as insufficient. A7Britain is expected to pro-vide combat gear to therebels, according to U.S.and European officials.n The $85 billion in so-calledsequester cuts take effect to-day if, as expected, Obamaand congressional leadersfind no way to avoid them. A1n The federal budget cutsare likely to hit hardest incertain regions of the coun-try, especially those with aheavy military presence. A4n Pope Benedict XVI endedhis reign as supreme leaderof the Catholic Church, thefirst time in six centuries thata pontiff has resigned. A1n Bradley Manning, the sol-dier accused of leaking docu-ments to WikiLeaks, admittedreleasing the information butdenied aiding the enemy. A6nTheWhiteHouse asked thehigh court to overturn Califor-nia’s same-sexmarriage ban butfell short of backing a constitu-tional right to gay unions.A6nThe House voted to renew alapsed domestic-violence lawafter GOP leaders moved toend a standoff. The bill was al-ready passed by the Senate. A6n China said two militarywebsites were the targets ofover 100,000 cyberattacks amonth last year, with mostcoming from the U.S. A8nBangladeshi police fired onrioting protesters after a war-crimes tribunal sentenced anIslamist politician to death. Theclashes left at least 30 dead. A8n Thailand agreed to peacetalks with Muslim insurgents,in an effort to stem a conflictin the country’s south. A8nThe Obama administrationnamed Edith Ramirez, a cur-rent FTC commissioner, to bethe next head of the agency. B3n South Africa is probingthe death of a man shown ina video being dragged downthe street by a police van. A9nA Congolese rebel factionsignaled it is ready to de-nounce its revolt and rejointhe country’s armed forces. A9n Japanese hardest hit by ra-diation from the 2011 nucleardisaster face only a tiny rise incancer risk, theWHO said. A9n Bombings struck Baghdadand towns south of the Iraqicapital, killing at least 22people in mostly Shiite areas.nAstronomers have spottedwhat they believe is a planet inthe process of being born inanother solar system. A3n Died: Bruce Reynolds, 81,mastermind of Britain’sGreat Train Robbery. A9

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TODAY IN MANSION

The $40 Million Party PadARENA Tech Moguls Become Art Patrons

What’s News–i i i i i i

Groupon Inc. on Thursdayfired its eccentric 32-year-oldchief Andrew Mason a day afterthe daily-deals company re-ported a quarterly loss thatmissed expectations and height-ened scrutiny about whether itsbusiness model is flawed.

During a board meetingThursday morning, Groupon di-rectors requested Mr. Mason exitthe company immediately, said aperson familiar with the board.

Before the board meeting, ten-sions had flared between Mr. Ma-son and Groupon co-founder andChairman Eric Lefkofsky. In late2012, Mr. Lefkofsky began agitat-ing for change, people familiarwith the matter have said. HeurgedMr. Mason to be more vocalin defending Groupon, which wasdealing with a precipitous stock-price decline, one person has said.Shares fell 24% Thursday to $4.53after the disappointing earnings.

Over the past month, at leastone Groupon director reachedout to other tech executives tocompile a list of possible CEO re-placements, said another personinvolved in the situation. It wasunclear if the board member wasacting on behalf of the board orif the approaches were informal.

Mr. Mason didn’t return callsfor comment. In a memo to em-ployees that was by turnstongue-in-cheek and rueful, hesaid, “After four and a half in-tense and wonderful years asCEO of Groupon, I’ve decidedthat I’d like to spend more timewith my family. Just kidding—Iwas fired today.”

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BY DAMIAN PALETTAAND JANET HOOK

CutsRoll In asTimeRunsOutAutomatic Spending Reductions Won’t Impact the Deficit’s Biggest Drivers

BY STACY MEICHTRYAND ALESSANDRA GALLONI

Pope Bids Faithful a FarewellIn Emotional, Historic Exit

Source: Bipartisan Policy Center

The Wall Street Journal

What Gets HitBreakdown of the fiscal 2013sequester cuts, in billions

Discretionarydefense

$42.7DiscretionaryNondefense

MedicareOther mandatory

$26.4

$11.1

$5.2

By Evelyn M. Rusli,Geoffrey A. Fowlerand John Letzing

StrugglingGrouponOusts ItsQuirkyCEO

Pope Benedict XVI leaves public life after giving a final blessing to the faithful at the papal summer residence.

Reuters/Tony

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ssociatedPress/AlessandraTarantino

AlexiaFodere

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treetJournal

Shhh! ‘Quiet Cars’ TurnCommuters Into Librarians

i i i

Quest for Relaxed Ride SometimesRaises Ruckus; ‘Vigilante’ Passengers

PRINCETON JUNCTION, N.J.—Welcome aboard the TensionTrain.

“As a reminder, folks, thistrain has two quiet cars,” an-nounces a conductor on a NJTransit train. “Please refrainfrom cellphone usageand keep all conver-sations down to aquiet tone.”

In theory, and of-ten in reality, thequiet car has been ahaven for commutersseeking peace. Pas-sengers who desirequiet stay in a desig-nated car, and chatty types inthe rest.

Tell that to the passengers onthe 8:07 p.m. NJ Transit expresstrain out of New York City latelast year. In an extreme exampleof the kind of scene that has

played out regularly on trainlines nationwide, two passen-gers mistakenly got on an ex-press train at Newark, N.J., in-stead of the local—and thenstood in the quiet car as theydiscussed their dilemma. Astranger on the train told themto shush. A shoving match en-sued. Police were called in. The

train was delayed onits route for 30 min-utes.

Some people, theconductor explainedto riders, “didn’tknow how to behavelike adults.”

A NJ Transitspokeswoman, NancySnyder, acknowledges

the occasional quiet-car incidentbut says the program has beenpopular. “We do not encouragecustomers to go about quietingother passengers,” she says.

Yet passenger-on-passengerPleaseturntopageA10

NJ Transit’s ‘Shhh’

BY WILLIAM POWERAND BRIAN HERSHBERG

Budget cuts will hit someareas harder than the rest..... A4

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