ProgressNow.org Daily News Digest

Top Democrats Favor Deliberate Approach to Stimulus Bill - washingtonpost.com

http://www.washingtonpost.com/wp-dyn/content/article/2009/01/04/AR2009010400979.html Lowering expectations for quick passage of an economic stimulus bill, Senate Majority Leader Harry M. Reid rejected setting "some false deadline" for delivering legislation to President-elect Barack Obama in favor of a more deliberate approach that allows Congress to get the package right "the first time." Congressional leaders had hoped to hand Obama an economic assistance package immediately after he is sworn in Jan. 20, but that looks increasingly doubtful as the legislation grows in complexity and size. In separate interviews this morning, Reid (Nev.) and House Majority Leader Steny H. Hoyer (D-Md.) said the process could take six more weeks. Obama officials are advocating that Congress direct about $300 billion of the stimulus package, or about 40 percent, toward tax breaks. Under these provisions, most workers would get a $500 payroll tax credit, as Obama advocated on the campaign trail, and many businesses would receive incentives to create jobs and make equipment purchases more affordable.

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Obama wants tax cuts in stimulus plan - Los Angeles Times

http://www.latimes.com/news/nationworld/nation/la-na-stimulus-details5-2009jan05,0,4983185.story President-elect Barack Obama's economic stimulus package will include hundreds of billions of dollars worth of tax breaks for individuals and businesses, according to a transition official and Democratic aides. Obama is asking that tax cuts make up 40% of a stimulus package, the officials say. The measure may be worth as much as $775 billion, a Democratic aide says, meaning tax cuts may constitute more than $300 billion of the legislation. Making tax cuts such a large part of the stimulus may help win support from congressional Republicans. Senate Minority Leader Mitch McConnell (R-Ky.) said his party would support an immediate middle-class tax cut as part of any stimulus package. The plan would attempt to boost consumer demand by spending $140 billion on tax breaks worth $500 for individuals and $1,000 for couples, according to a House Democratic aide.

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House leader: Stimulus unlikely before Obama’s inauguration - USATODAY.com

http://www.usatoday.com/news/washington/2009-01-04-hoyer-stimulus_N.htm Congressional Democrats said Sunday that President-elect Barack Obama probably will have to wait until next month before getting the chance to sign an economic stimulus bill his team once hoped would be on his desk by his inauguration on Jan. 20. "It's going to be very difficult to get the package put together that early," House Majority Leader Steny Hoyer of Maryland said. "But we certainly want to see this package passed through the House of Representatives no later than the end of this month, get it over to the Senate, and have it to the president before we break" in mid-February. Obama planned to meet with Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi on Monday to talk about enacting a massive spending plan. The president-elect also scheduled a separate meeting with the entire Democratic and Republican leadership teams.

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Governors Call for $1 Trillion Stimulus to Offset Budget Cuts - washingtonpost.com

http://www.washingtonpost.com/wp-dyn/content/article/2009/01/02/AR2009010202277.html To help offset state budget cuts, a group of Democratic governors urged the federal government Friday to pass a $1 trillion economic stimulus package, significantly larger than the one under discussion in Congress. The package would help states compensate for cuts to education spending that could cause long-term economic decline, as well as bolster infrastructure projects and benefits programs for the poor, the governors from New York, New Jersey, Massachusetts, Ohio and Wisconsin said in a news conference. Congress is reportedly considering $675 billion to $775 billion in stimulus spending, but the governors suggested the package must be larger to have psychological and economic impact. "The scope of it needs to be substantial," and it must "include this education piece," said New Jersey Gov. Jon S. Corzine.

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After IndyMac: More banks may become private - USATODAY.com

http://www.usatoday.com/money/industries/banking/2009-01-02-indymac-sale_N.htm The pending sale of IndyMac Bank to investment firms is likely the start of an era in which banks, generally considered the most public of institutions, will increasingly fall into private hands. On Friday, regulators announced they had signed a letter of intent to sell the troubled mortgage lender for nearly $14 billion to a group led by private-equity firm Dune Capital Management. The government has been searching for a buyer for IndyMac since July, when it collapsed after customers withdrew $1.3 billion in 11 days on worries about the thrift's solvency. Private-equity firms and hedge funds have long been able to own stakes in banks. But regulators' willingness to allow these entities to buy banks outright is "historic," says Scott Talbott, senior vice president of government affairs for the Financial Services Roundtable, which represents banks. The deal "represents the economic pressure on banks, and the demand (on regulators) by the extraordinary times," Talbott says.

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Manufacturing Is Down in U.S., Worldwide - washingtonpost.com

http://www.washingtonpost.com/wp-dyn/content/article/2009/01/02/AR2009010200956.html U.S. manufacturing activity decreased in December at its fastest pace in nearly 30 years, as businesses cut production and slashed product orders in response to the global recession, according to a closely watched survey. The Institute for Supply Management's index of industrial production slipped from 36.2 percent in November to 32.4 percent in December, the lowest level since June 1980. A reading above 50 indicates that manufacturing activity is expanding, while a reading below 50 indicates a contraction. None of the industries covered in the survey reported an expansion in their business, and the drop registered not just in the institute's index of production, but also in the volume of new orders and raw material costs. "We're looking around for evidence not of things turning up but that things are not going down as rapidly, and at the moment, we can't find any evidence," said Nigel Gault, chief U.S. economist for Global Insight. "Things are falling very fast."

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Construction spending falls less than expected - USATODAY.com

http://www.usatoday.com/money/economy/2009-01-05-construction_N.htm Construction spending fell 0.6% in November, the Commerce Department reported Monday, showing that building at the end of 2008 was stronger than Wall Street had expected. Analysts polled by Reuters had anticipated the drop to be a much steeper 1.3%. October's change was also revised to down 0.4% from the originally reported drop of 1.2%. Still, private residential construction, which makes up roughly a third of total spending, fell a sharp 4.2% to $328 billion, the lowest annual rate since August 1999.

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College Degree No Shield As More Jobs Are Slashed - washingtonpost.com

http://www.washingtonpost.com/wp-dyn/content/article/2009/01/03/AR2009010302143.html When Nena Razmara was laid off in November from her $70,000-a-year job with a high-end residential building supplier, she thought she would be working again by Christmas. Having worked in residential construction for 20 years, she was used to finding work by flipping through her Rolodex. "Usually it's three phone calls, three job offers, and off you go," she said. The 45-year-old Woodbridge resident made her three phone calls. Then three more. But she still had no leads. For the first time since she graduated from college in the 1980s, she scoured help-wanted ads. She sent out more than 150 résumés and posted one on Craigslist under the heading, "I desperately need a job."

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Obama Team Is Seeking Stimulus Bill by New Year - NYTimes.com

http://www.nytimes.com/2008/12/19/us/politics/19stimulus.html?ref=washington “The goal for completing action on this important legislation should be as close to Jan. 20 as possible,” said an e-mail message from Senate Majority Leader Harry Reid’s office to senior Senate Democratic staff members. Some Obama advisers have sought to tamp down expectations that Mr. Obama could sign a package immediately after he is inaugurated. The opposition of some Senate Republicans and House and Senate negotiations on a final compromise could force delays into February. Democrats familiar with the early deliberations say the preliminary price tag has grown to about $800 billion from the roughly $600 billion that House Speaker Nancy Pelosi had estimated in recent days. Mark Zandi, a Republican economist who is advising the Democrats, said in an interview that the worsening economy could push his updated recommendation in January up to $1 trillion for a two-year government stimulus.

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Obama introduces more economic appointees - Los Angeles Times

http://www.latimes.com/news/nationworld/nation/la-na-obama19-2008dec19,0,7442457.story His comments suggested that a regulatory crackdown could be part of his response to the current economic downturn. They came as he introduced Mary Schapiro, head of the Financial Industry Regulatory Authority, as his choice to lead the Securities and Exchange Commission. Schapiro's appointment was rumored Wednesday. Obama, at the news conference, also named former Treasury official Gary Gensler to head the Commodity Futures Trading Commission, and Georgetown law professor Dan Tarullo to serve as a governor on the Federal Reserve Board. "If the financial crisis has taught us anything, it's that this failure of oversight and accountability doesn't just harm individuals involved," Obama said. "It has the potential to devastate our entire economy, and that's a failure we can't afford."

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More struggling companies delisted from Nasdaq, NYSE - USATODAY.com

http://www.usatoday.com/money/markets/2008-12-18-delist-companies-nasdaq_N.htm Some companies aren't just seeing their credit dry up. Now they're losing their ticker symbols. In the latest strain on companies already struggling to borrow, a swelling number are being delisted from stock exchanges. This is taking the capital drought to a new level, because delisted companies may have even more trouble raising money. "It's a reflection of the times," says Richard Cripps of Stifel Nicolaus. "Companies aren't getting capital." This year, the New York Stock Exchange and Nasdaq Stock Market have delisted 129 companies for violating listing standards, the highest number since 226 in 2003. That number is likely to swell when the Nasdaq reinstates its rule that companies maintain a stock price of at least $1 over 30 trading days. Nasdaq is expected to announce as soon as today that it is extending the suspension of its $1 rule three months to April 20, 2009. It was suspended this year as the market went into free fall.

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Iran mulls financial bailout as stock market falls - Los Angeles Times

http://www.latimes.com/news/nationworld/world/la-fg-iran-bailout19-2008dec19,0,6482469.story A key index has fallen more than 2,000 points as businesses are hit by flagging oil and commodities prices. An ailing economy could hamper President Ahmadinejad's prospects in June elections.

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New rules restrict credit card abuses - USATODAY.com

http://www.usatoday.com/money/perfi/credit/2008-12-18-credit-cards-new-rule_N.htm Federal regulators on Thursday adopted sweeping new rules for the credit card industry, including a provision that will shield consumers from increases in interest rates on existing account balances. The rules, which take effect in July 2010, will allow credit card companies to raise interest rates only on new credit cards and future purchases or advances, rather than on current balances.

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Stimulus plan could shape course of Barack Obama’s presidency - Los Angeles Times

http://www.latimes.com/news/nationworld/nation/la-na-obama-stimulus18-2008dec18,0,4434695.story When the new Congress convenes on Jan. 6, Senate Democrats will still lack the 60-vote majority needed to stave off GOP delay tactics -- a reality that gives Republicans some confidence that they can win concessions. Obama has identified the stimulus package as an urgent priority. His economic advisors are considering a package of no less than $600 billion and potentially as much as $1 trillion over two years, according to the transition office. The fate of the bill could shape the course of Obama's presidency. If it works, it could help lift the economy out of recession, giving him the space to enact his ambitious energy, education and healthcare plans. Behind him is a formidable array of interest groups eager to see a major national spending program unleashed. Business groups and organized labor, mayors and governors -- all will be pressing lawmakers to pass Obama's spending plan. For her part, House Speaker Nancy Pelosi has touted a $600-billion plan that would include the middle-class tax cut Obama laid out during the campaign. New Jersey Gov. Jon Corzine, a Democrat, said in an interview Wednesday that he wanted to see Obama sign the bill on the day he is sworn in. In talks with his congressional delegation, Corzine said, he learned that the "goal is to have something on the president's desk on Inauguration Day."

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Dollar’s Slump Erases Months Of Solid Gains - washingtonpost.com

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/17/AR2008121703940.html The dollar yesterday staged one of its biggest one-day drops against the euro and fell to a 13-year low against the Japanese yen as near-zero interest rates and the Federal Reserve's plan to print vast sums of cash dilute the value of the greenback. The drops dramatically accelerated the dollar's reversal of fortune over the past three weeks after months of solid gains. The slide underscores the risks the Federal Reserve is taking to jump-start the U.S. economy through aggressive monetary policy. On Monday, the Fed cut its target for the federal funds rate, at which banks lend to each other, from 1 percent to a target range of 0 percent to 0.25 percent, and effectively vowed to print as much money as it needs to try to pull the United States from a worsening recession.

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Obama picks 3 financial regulators during unrelenting market turmoil—chicagotribune.com

http://www.chicagotribune.com/news/politics/sns-ap-obama,0,5575263.story President-elect Barack Obama on Thursday named three veteran regulators to round out his economic team and vowed to revamp regulatory rules to prevent a repeat of the financial and economic debacles the country is suffering through. He sidestepped questions about whether he would support a decision by Treasury Secretary Henry Paulson to tap the second $350 billion installment of the $700 billion financial bailout program. Major auto companies are pleading for emergency aid, which could come from that pot. "I think it's important for the Treasury, the Fed and all of us to do whatever is required to make sure our financial system is stable and secure," Obama said. But he added: "We cannot afford a collapse of our financial system. Main Street can't afford it." Obama blamed regulators for the financial debacle, saying they "dropped the ball." Regulators, he said, "have been asleep at the switch."

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Jobless claims fall, but economic indicators drop again - USATODAY.com

http://www.usatoday.com/money/economy/2008-12-18-economy-jobless_N.htm The Conference Board's index of leading economic indicators fell for a second month, dropping 0.4% in November. That was slightly better than the 0.5% decline economists expected. The index is designed to forecast economic activity three to six months ahead, based on 10 economic components, including stock prices, building permits and unemployment claims.

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Obama Pick to Lead SEC Is Veteran Wall St. Regulator - washingtonpost.com

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/17/AR2008121703692.html President-elect Barack Obama has chosen a veteran regulator to head the Securities and Exchange Commission, the beleaguered agency that has been pilloried by lawmakers for failing to prevent the global financial meltdown, senior Democratic officials said yesterday. The selection of Mary L. Schapiro, who would be the first woman to chair the SEC on more than an interim basis, follows a series of high-profile controversies that have raised doubts about its competence as the chief enforcer of Wall Street under the leadership of its current chairman, Christopher Cox. The SEC's failure to detect Bernard L. Madoff's alleged $50 billion Ponzi scheme before it was revealed last week has prompted even Cox himself to question the agency's performance. Schapiro, a Wall Street regulator for 20 years with a reputation for tenacity, is likely to push the SEC to become more aggressive in policing the financial industry and advocating the agency's interests as lawmakers push for an overhaul of the financial regulatory structure, according to former officials and colleagues.

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U.S. Links Iranian Bank To Fifth Avenue Building - washingtonpost.com

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/17/AR2008121703844.html A Fifth Avenue building in Manhattan that houses a Charles Schwab branch, a trendy espresso boutique and Juicy Couture's flagship store is secretly co-owned by an Iranian bank that helped finance that country's nuclear program, the Justice Department alleged yesterday. Justice is seeking to seize the share of the property and related bank accounts, charging that 40 percent of 650 Fifth Avenue has been co-owned by Iran's Bank Melli for nearly two decades. That bank was previously designated by the Treasury Department as a key financier of Iran's nuclear and ballistic missile programs and a banker to the Iranian Revolutionary Guard Corps and its Quds Force, which has been linked to terrorist groups.

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Feds adopt rules to crack down on some credit card abuses - USATODAY.com

http://www.usatoday.com/money/perfi/credit/2008-12-17-credit-cards-new-rule_N.htm In the most sweeping changes to credit cards in decades, federal regulators on Thursday approved new rules to crack down on so-called unfair and deceptive practices by card issuers, such as raising interest rates on existing debt. The rules, issued by the Office of Thrift Supervision and expected to be approved later Thursday by the Federal Reserve and the National Credit Union Administration, come at a time when the economy has plunged into recession, and loan delinquencies and charge-offs are swelling as borrowers struggle to pay their bills. The rules, which take effect in July 2010, will let credit card companies raise interest rates only on new credit cards and future purchases or advances, rather than on current balances. They also restrict such lender practices as allocating all payments to balances with lower interest rates when a borrower has balances with different rates.

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Lawmakers brawl in South Korean parliament over free trade deal with US—chicagotribune.com

http://www.chicagotribune.com/business/sns-ap-as-skorea-us-free-trade,0,7926799.story Brawling South Korean lawmakers tried to sledgehammer their way into a parliamentary meeting room barricaded by the ruling party as the National Assembly descended into chaos Thursday over a free trade agreement with the United States. Opposition parties were incensed by the ruling Grand National Party's move to submit the agreement to a committee on trade, setting in motion the process for the accord to win approval in the legislature. Security staff and aides from the ruling party stood guard outside the room to keep opposition lawmakers away after the committee's GNP-affiliated chairman invoked his right to use force to "keep order" in parliamentary proceedings. Scuffles broke out as dozens of opposition members and their aides attempted to push their way into the office. TV footage showed people from both sides shoving, pushing and shouting in a crowded hall at the National Assembly building amid a barrage of flashing cameras.

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Shipping Sector Expects A Leaner Holiday Haul - washingtonpost.com

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/17/AR2008121703350.html L ooks like Santa's sleigh will be a little lighter this year. Delivery of packages and mail has been down with the rest of the economy, and the shipping industry is counting on this week -- expected to be the busiest of the year -- for a final boost to lift it out of its slump before Christmas. FedEx lowered its annual earnings forecast this month as the recession gripped the globe. UPS decided it would not even try to estimate how much mail it would deliver this holiday season because of "unpredictability in the economy," spokesman Malcolm Berkley said. And the U.S. Postal Service said it expects its holiday mail to fall by 1 billion pieces. "Christmas as best we can tell has more or less been canceled," FedEx chief executive Fred Smith said in a recent interview. "There's just no two ways about it. The economy is extremely slow." Reindeer: You've been put on notice.

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Madoff Scandal Shaking Real Estate Industry - NYTimes.com

http://www.nytimes.com/2008/12/18/business/18brokers.html?ref=us The outsize impact on the industry may have resulted largely because Mr. Madoff (pronounced MAY-doff) managed his funds much the way that real estate leaders have operated successfully for decades: He provided little information and demanded a lot of trust. “You have a lot of wealthy people who made a lot of money on handshakes,” said Mark S. Weiss, a commercial real estate broker at Newmark Knight Frank, where several brokers had invested heavily with Mr. Madoff. There was “something about this person, pedigree and reputation that inspired trust,” he said. Across the city, industry executives said deals had been scuttled or jeopardized because of the scandal. Residential brokers are taking calls from Madoff investors who have had to put their apartments on the market. Many developers had pledged their investments with Mr. Madoff as collateral for projects, and are now worried that their banks will call in their loans.

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Barack Obama to pick Iowa’s Tom Vilsack for agriculture secretary - chicagotribune.com

http://www.chicagotribune.com/news/nationworld/chi-obama-vilsackdec17,0,3017348.story Former Iowa Gov. Tom Vilsack, who aggressively campaigned for Sen. Hillary Clinton before his state's precinct caucuses in January, will be named agriculture secretary by President-elect Barack Obama, three Democratic officials confirmed Tuesday. The formal announcement was expected Wednesday morning at a news conference in Chicago. Vilsack declined to comment on the report. "Those questions should be answered by the transition office and the president-elect," he said, answering his cell phone from what he said was Des Moines. The former two-term Democratic governor has been a supporter of renewable energy and pushed for development of Iowa's ethanol industry. The state is one of the nation's top producers of corn and hogs and also has a large meatpacking industry.

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Fed Cuts Key Rate to a Record Low - NYTimes.com

http://www.nytimes.com/2008/12/17/business/economy/17fed.html?_r=1 Though important as a historic milestone, the move to an interest rate of zero from 1 percent is largely symbolic. The funds rate, which affects what banks charge for lending their reserves to each other, had already fallen to nearly zero in recent days because banks have been so reluctant to do business. Of much greater practical importance, the Fed bluntly announced that it would print as much money as necessary to revive the frozen credit markets and fight what is shaping up as the nation’s worst economic downturn since World War II. In effect, the Fed is stepping in as a substitute for banks and other lenders and acting more like a bank itself. “The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth,” it said. Those tools include buying “large quantities” of mortgage-related bonds, longer-term Treasury bonds, corporate debt and even consumer loans.

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