Clem Lane here again with another ABC NEWS evening editorial note.
BUDGET-President Obama unveiled his budget plan for 2010. We’re getting used to big numbers with all this bail-out business-here’s another one: $3.5 trillion. Jake Tapper in his WORLD NEWS piece described the budget outline as a "dramatic, perhaps even radical, break from current policies. President Obama is attempting to redirect vast sums of money from businesses and wealthier individuals to those in lower incomes and ambitious and costly new programs for the environment, education and health care." Let’s break this out a bit-we’ve got $770 billion in tax cuts for the middle class over the next ten years…$150 billion for alternative energy…more than $630 billion for health care. Tapper tells us that "much of the spending is being done with money the government does not have, creating a $1.75 trillion deficit next year alone." What about the wealthy getting slammed? Tapper says "almost $1 trillion of the spending comes from new taxes over the course of the next ten years (starting in 2011), most of them targeted at families earning more than $250 thousand a year." David Muir, filing for WORLD NEWS, introduced us to Scott Busby, a married Atlanta lawyer and father of three. Faced with additional taxes, new limits on tax deductions from their mortgage to their charitable giving, Busby says "that American dream that I’ve enjoyed is somewhat in jeopardy." And businesses would face an additional $353 billion in taxes. Needless to say, critics of the plan were numerous. Marty Regalia, the chief economist at the U.S. Chamber of Commerce, called Obama’s tax proposals "the biggest return to the welfare state that we’ve seen in decades." "We can’t tax and spend our way to prosperity," said House GOP leader John Boehner of Ohio. "The era of big government is back, and Democrats are asking you to pay for it." George Stephanopoulos, appearing on WORLD NEWS, told Charles Gibson that that nearly $1 trillion in tax increases that Republicans oppose en masse are a problem for many Democrats too. Stephanopoulos said "It seems as if here in Washington, the President is going to have to choose between two of the big priorities, health care and energy…talking to Democrats in the Administration, if they had to decide today, they would lean in the direction of health care." The money for health care, more than $630 billion, Charles Gibson reminds is set aside "but we don’t even know what the health care reform program is yet." Dr. Tim said on WORLD NEWS, "we don’t know how much would go to the uninsured or how quickly it would get there….on the other hand, health care experts I talked to today are thrilled with this budget proposal. They see it as a very strong signal from the President that is indeed very serious about health-care reform, and willing to put a lot of money behind his rhetoric."
BANK OF AMERICA/MERRILL LYNCH BONUSES-Don’t banks employ image-consultants? As you know, the NY Attorney General’s office is looking into $3.6 billion in bonuses given to Merrill Lynch employees the same year the company almost flatlined and was buried (okay merged) inside Bank of America with the help of some $45 billion in taxpayer money. Today, Brian Ross told us on WORLD NEWS, "the Bank of America president, Ken Lewis, flew to NY from the bank’s headquarters in Charlotte, North Carolina, in one of the bank’s nine corporate jets. A $50 million Gulfstream-5, a top luxury craft that costs five thousand dollars an hour just for gas and pilots." Well how else is Mr. Lewis going to get to NY, I mean can you even fly commercially out of Charlotte? That darn Brian Ross checked and tells us "a scheduled commercial flight on US Airways would have cost $440". (Okay image consultants-let’s review. Ostentatious display of luxury in a time of economic crisis when there’s a low-cost commercial airline alternative? B-A-D.) But let’s get to the meat of Mr. Lewis’ visit to NY today-to talk to the AG’s office about the bonuses. Lewis had previously told a Congressional panel earlier this month that he had minimal involvement in the bonus awards, dumping it back on Merrill execs. Ross says that NY Attorney General Andrew Cuomo believes "Lewis’ staff did much more, went to Merrill Lynch offices to actually help set up the bonus amounts." Further Ross adds that "NY investigators believe Lewis has not told the ‘whole story’ of his role in the controversial bonus package." I’m sure there will be follow-up visits to NY for Mr. Lewis-here’s hoping he gets an exit-row aisle seat on that US Airways flight in the future.
ECONOMIC NOTES TODAY-
–STANFORD CFO ARRESTED-Breaking news tonight on the financial scam front. Jason Ryan tells us that " Laura Pendergest-Holt, the chief investment officer the Stanford Financial Group (SFG), has been arrested by FBI agents on a criminal complaint charging her with obstruction of a proceeding by the SEC. The FBI released a statement tonight which said "Pendergest-Holt was arrested around 3pm this afternoon at the Stanford offices in Houston. FBI Houston agents arrested her without incident. She was transported to the federal detention center downtown, where she awaits an initial appearance sometime tomorrow."
–HEALTH OF THE BANKING INDUSTRY-The FDIC released some 4th quarter figures-more than 250 banks are on its’ "watch list" an increase of 47% from the previous quarter. All told, the banks the FDIC insured lost more than $26 billion in the quarter, the first time the sector has seen a loss since 1990. Good news? Well consumers seem to be putting more money in the bank-there was a huge (nearly 4%) surge in deposits in the 4th quarter. Deposits for the year increased 8.4 percent. Lots more in Herman/Arnall/Jaffe note to the Business News DL.
–GENERAL MOTORS LOSS-The car company disclosed today that it suffered a loss of nearly $31 billion last year, burning its way through more than $19 billion in cash. The 4th (and most recent) quarter isn’t trending well either-with the company saying $9.6 billion was lost in the 4th quarter and that it burned through $6.2 billion in cash.
–NEW HOME SALES-From Dan Arnall: "The Commerce Department reported that sales of newly built homes drop by 10.2% during January to a seasonally adjusted annual sales pace of 309,000 units.This is the worst monthly sales pace in the history of the survey which goes all the way back to 1963. It’s also worse than the number that economists were expecting (329K). With sales dropping so steeply, prices plummeted, too. The median price of a new home sold in January was $201,100, down an astounding 9.9% in just one month! What’s particularly worrisome about today’s report is that the inventory of new homes ticked upward – 13.3 months supply at the current sales pace. So even with builders cutting back tremendously on new construction, we’re still far from a point of recovery in the new home market."
–UNEMPLOYMENT FIGURES-The number of people remaining on the benefits roll after drawing an initial week of assistance increased by 114,000 to a record 5.11 million in the week ended Feb. 14, the most recent week for which data is available, the Labor Department said. Initial claims for state unemployment insurance benefits increased to a seasonally adjusted 667,000 last week from 631,000 the prior week, the department said. It was the highest reading since October 1982. Arnall says "this report makes a big jump in the unemployment rate for February almost a sure thing. We get the Jobs report for the month at the end of next week."
–OIL PRICES-Oil settled above $45 today, rising more than 6 percent to close at $45.22 here in NY. Expectations of a further OPEC cut in production when they next meet in March helped spur the gain. So did yesterday’s U.S. Government figures which noted an increase in gasoline demand here in the US.
–JANUARY DURABLE GOODS-Dan Arnall: " Manufacturers saw orders for big-ticket items drop by 5.2% in January – much more than economists were expecting. It was the sixth straight month of falling factory activity – a record run of falling orders."
FLAG DRAPED CASKETS: It has been nearly 18 years since the news media was allowed to take photos of American service members’ caskets arriving at Dover Air Force Base. Today, Defense Secretary Robert Gates announced that the DOD would change its policy on media access to the fallen soldiers. But rather than dictate the change, Gates said “We should not presume to make the decision for the families — we should actually let them make it". Luis Martinez reported that the details of media coverage are still being worked out but it is likely that the coverage will be similar to the current policy at Arlington cemetery. With the policy change, David Wright reported on WORLD NEWS, “The lifting of the ban means Americans will soon be confronted — in a way that they haven’t for years — with the human cost of war.” Dover AFB is the largest military mortuary and has been used for processing military personnel killed in both war and peacetime. (thanks to Faisal Jamil for this entry)
SABER RATTLING-Pyongyang insists that it is preparing to fire a communication satellite into orbit as part of its space program. But the U.S., South Korea and other countries in the region are pretty sure the launch may just be a cover for a long range missile test. Today, the North accused South Korea in particular of "trumpeting about ‘sanctions"’ and vowed to punish "puppet warmongers" for infringing upon North Korea’s dignity. Our Martha Raddatz this week had an exclusive interview with Admiral Timothy Keating, head of the U.S. Pacific Command and she filed this evening for WORLD NEWS. Keating told Martha that the U.S. is ready to take action against North Korea, if necessary. "Should it look like it’s something other than a satellite launch, we will be fully prepared to respond as the President directs." And that, Keating says, includes the capability of shooting it down if the President so directs. Martha points out the U.S. has plenty of fire power: "In addition to space radars and space based systems which monitor missile launches, there are 18 Aegis cruisers and destroyers … capable of missile defense." In the meantime, Secretary of State Hillary Rodham Clinton is sending her new envoy for North Korea policy, Stephen Bosworth, to Asia early next week to work on reviving stalled international talks on North Korea’s nuclear program. Just yesterday, CIA Director Leon Panetta said it appears Kim Jong-il is still in control of his country, despite health concerns. But Admiral Keating is not so sure: "That’s really the $64,000 question in my mind. Is he in full retention of his facilities, uh, not certain." (thanks to Ed Bailey for this entry)
LAURA BUSH-In her first interview since leaving the White House, former First Lady Laura Bush told Jon Karl on WORLD NEWS that "we’re all unpacked. And George has actually made a trip to the hardware store to pick up nightlights so we can find our way to the bathroom in the middle of the night" Perhaps more importantly (worth extra ‘honey-do’ points), "He has brought me coffee every morning since (we’ve been back in Texas). And that’s great. We’re back to our old routine."There will be lots more of Karl’s interview on tomorrow’s GOOD MORNING AMERICA.
SPRING BREAK IN MEXICO? DANGER WILL ROBINSON!-More than 100,000 high school and college-age Americans travel to Mexican resort areas during spring break each year. Hey dudes, guess what? People are getting whacked there. More than 6000 people were killed in drug violence last year. So the State Department has issued a travel warning. The State Department stopped short of warning spring breakers not to go to Mexico, but advised them to avoid areas of prostitution and drug-dealing and take other commonsense precautions. Universities have added their own two cents and in some cases (University of Arizona) counseled students to avoid the country entirely.
–The Senate has passed the DC VOTING RIGHTS ACT by a vote of 67-31 .The Senate legislation would give the district a vote in the House of Representatives. To placate those who see it as an extra seat for the Democrats, the bill adds a seat in Republican-leaning Utah. The House is to take up the measure next week and is expected to pass it easily. Expect a court challenge from opponents.
– The Federal Trade Commission today released the list of top CONSUMER COMPLAINTS received by the agency in 2008. First by a long shot-Identity theft, accounting for more than a quarter of the 1.2 million-plus complaints. Next up-a new category for the list and a “sign of the times”-debt collectors were the reason for more than 100 thousand complaints.
–Buzzkill. The ROCKY MOUNTAIN NEWS WILL PUBLISH ITS LAST EDITION TOMORROW MORNING. The News was Colorado’s oldest newspaper and has been a Denver fixture since 1859. Scripps, the RMN’s parent company, has been trying to find a buyer since December. Denver’s lone paper THE DENVER POST will resume seven-day-a-week publication and hire 10 of the 230 editorial employees at the News.
–That sound you hear? NBC SPORTS executives crying in their energy drinks. TIGER WOODS return to golf was derailed today when he lost his 2nd round match to South African Tim Clark in the WGC-Accenture Match Play assuring one more week of "anybody but Tiger" in the weekend winner’s circle.
–CONSUMER REPORTS released its TOP 2009 CARS today. Bad economic times have led to a new category-"Best Car Value" being added. That would be the 2008 Toyota Prius.