Thursday, October 29, 2009

Though the credit bureaus must give you free annual reports, their important numbers will cost you. Now 3 sites offer free peeks at those scores, but how helpful are they?

If you're curious about your credit scores, you might have tried one of the plethora of Web sites and services that offer some free credit information, then lure you into paying for your scores, usually as part of a credit-monitoring package.
Weird stuff that hurts your credit

Consumers are entitled by law to free credit reports-- which are simply records of your borrowing and repayment history -- but the numerical scores derived from those reports will cost you, in part because credit-reporting agencies aren't required by law to provide them for free to consumers along with the reports.

Now a handful of company Web sites give consumers at least free glimpses at their credit scores. The sites --, Credit Karma and Quizzle -- offer a window into the key factors that go into calculating your scores, what you can do to improve them and how your credit stacks up against other people's. Last week, for example, launched free credit report cards that show consumers how they're likely to rate across five credit-scoring models.

All three sites, which have ties to the credit industry, aim to make money through advertising or through fees if users sign up for products offered on the site, such as credit-monitoring services, credit cards or mortgages.

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Wednesday, June 17, 2009

Obama Signs Credit Card Reform Bill

President Barack Obama warned overeager shoppers and greedy credit card companies alike on Friday to act responsibly as he signed into law a bill designed to protect debt-ridden consumers from surprise charges.

The White House staged a signing ceremony in the Rose Garden, an indication of the legislation's importance to Obama. Though opposed by many financial companies, the bill cleared Congress with broad support.

Obama made clear that he didn't champion the changes with the intention of helping those who buy more than they can afford through "reckless spending or wishful thinking."

"Some get in over their heads by not using their heads," the president said. "I want to be clear: We do not excuse or condone folks who've acted irresponsibly."

And yet, he said, for many of the millions of Americans who use credit cards and carry a balance, trying to get out of debt has been made difficult and bewildering by their credit card companies.

Obama said many "got trapped" because of the downturn in the economy that has turned family budgets on their heads. But, he said, "part of it is the practices of the credit card companies."

He criticized policies that allowed for confusing fine print; the sudden appearance of unexplained fees on bills; unannounced shifts in payment deadlines, interest charges or rate increases even when payments aren't late; and payments directed to balances with the lowest interest rates rather than the highest.

"We're here to put a change to all that," Obama said.

One part of the bill Obama did not publicly celebrate at the signing, a gun amendment. The measure by Sen. Tom Coburn, R-Okla., allows people to bring loaded
guns into national parks and wildlife refuges.

The addition of the amendment to the bill — and Obama's acceptance of it — was viewed as a bitter disappointment for gun-control advocates.

They watched gun-rights supporters gain a victory from a Democratic-controlled Congress and a Democratic president that they couldn't achieve under a Republican Congress and president. Many blamed the National Rifle Association, which pushed hard for the gun law.

The new credit card rules, which go into effect in nine months, prohibit companies from giving cards to people under 21 unless they can prove they have the means to pay the debt or a parent or guardian co-signs. A customer also will have to be more than 60 days behind on a payment before seeing a rate increase on an existing balance. Even then, the lender will be required to restore the previous, lower rate if the cardholder pays the minimum balance on time for six months.

And consumers also will have to receive 45 days' notice and an explanation before their interest rates increase.

Last year, the Nilson Report estimated that more than 700 million credit cards were in circulation in the United States. That's more than two cards for every man, woman and child.

The president noted that nearly half of all Americans carry a balance on their credit cards, and that their average balance is more than $7,000. According to the Federal Reserve, the nation is some $2.5 trillion in debt, a figure that does not include home mortgages.

Obama decried the "uneasy, unstable dependence" that a minority of card users have on credit.

"So we're not going to give people a free pass, and we expect consumers to live within their means and pay what they owe," Obama said. "But we also expect financial institutions to act with the same sense of responsibility that the American people aspire to in their own lives."

Good move!!!

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Monday, March 30, 2009

President Obama’s Remarks on the U.S. Auto Industry

Editor’s note: This morning President Obama delivered a speech on the U.S. auto industry covering events of this past weekend and recapping much of the news from the last several months. What follows are the remarks as prepared for the President and circulated ahead of time by the White House Press Office. The actual speech varied somewhat from the prepared remarks, but what follows contains the substance. We highlighted one section for added emphasis since it makes reference to a new initiative for moving more new vehicles.

Remarks of President Barack Obama

Announcement on the Auto Industry

One of the challenges we have confronted from the beginning of this administration is what to do about the state of our struggling auto industry. In recent months, my Auto Task Force has been reviewing requests by General Motors and Chrysler for additional government assistance as well as plans developed by each of these companies to restructure, modernize, and make themselves more competitive. Our evaluation is now complete. But before I lay out what needs to be done going forward, I want to say a few words about where we are, and what led us to this point.

It will come as a surprise to no one that some of the Americans who have suffered most during this recession have been those in the auto industry and those working for companies that support it. Over the past year, our auto industry has shed over 400,000 jobs, not only at the plants that produce cars but at the businesses that produce the parts that go into them, and the dealers that sell and repair them. More than one in ten Michigan residents is out of work – the most of any state. And towns and cities across the great Midwest have watched unemployment climb higher than it’s been in decades.

The pain being felt in places that rely on our auto industry is not the fault of our workers, who labor tirelessly and desperately want to see their companies succeed. And it is not the fault of all the families and communities that supported manufacturing plants throughout the generations. Rather, it is a failure of leadership – from Washington to Detroit – that led our auto companies to this point.

Year after year, decade after decade, we have seen problems papered-over and tough choices kicked down the road, even as foreign competitors outpaced us. Well, we have reached the end of that road. And we, as a nation, cannot afford to shirk responsibility any longer. Now is the time to confront our problems head-on and do what’s necessary to solve them.

We cannot, we must not, and we will not let our auto industry simply vanish. This industry is, like no other, an emblem of the American spirit; a once and future symbol of America’s success. It is what helped build the middle class and sustained it throughout the 20th century. It is a source of deep pride for the generations of American workers whose hard work and imagination led to some of the finest cars the world has ever known. It is a pillar of our economy that has held up the dreams of millions of our people. But we also cannot continue to excuse poor decisions. And we cannot make the survival of our auto industry dependent on an unending flow of tax dollars. These companies – and this industry – must ultimately stand on their own, not as wards of the state.

That is why the federal government provided General Motors and Chrysler with emergency loans to prevent their sudden collapse at the end of last year – only on the condition that they would develop plans to restructure. In keeping with that agreement, each company has submitted a plan to restructure. But after careful analysis, we have determined that neither goes far enough to warrant the substantial new investments that these companies are requesting. And so today, I am announcing that my administration will offer GM and Chrysler a limited period of time to work with creditors, unions, and other stakeholders to fundamentally restructure in a way that would justify an investment of additional tax dollars; a period during which they must produce plans that would give the American people confidence in their long-term prospects for success.

What we are asking is difficult. It will require hard choices by companies. It will require unions and workers who have already made painful concessions to make even more. It will require creditors to recognize that they cannot hold out for the prospect of endless government bailouts. Only then can we ask American taxpayers who have already put up so much of their hard-earned money to once more invest in a revitalized auto industry. But I am confident that if we are each willing to do our part, then this restructuring, as painful as it will be in the short-term, will mark not an end, but a new beginning for a great American industry; an auto industry that is once more out-competing the world; a 21st century auto industry that is creating new jobs, unleashing new prosperity, and manufacturing the fuel-efficient cars and trucks that will carry us toward an energy independent future. I am absolutely committed to working with Congress and the auto companies to meet one goal: the United States of America will lead the world in building the next generation of clean cars.

No one can deny that our auto industry has made meaningful progress in recent years. Some of the cars made by American workers are now outperforming the best cars made abroad. In 2008, the North American Car of the Year was a GM. This year, Buick tied for first place as the most reliable car in the world. And our companies are investing in breakthrough technologies that hold the promise of new vehicles that will help America end its addiction to foreign oil.

But our auto industry is not moving in the right direction fast enough to succeed. So let me discuss what measures need to be taken by each of the auto companies requesting taxpayer assistance, starting with General Motors. While GM has made a good faith effort to restructure over the past several months, the plan they have put forward is, in its current form, not strong enough. However, after broad consultations with a range of industry experts and financial advisors, I’m confident that GM can rise again, provided that it undergoes a fundamental restructuring. As an initial step, GM is announcing today that Rick Wagoner is stepping aside as Chairman and CEO. This is not meant as a condemnation of Mr. Wagoner, who has devoted his life to this company; rather, it’s a recognition that it will take a new vision and new direction to create the GM of the future.

In this context, my administration will offer General Motors adequate working capital over the next 60 days. During this time, my team will be working closely with GM to produce a better business plan. They must ask themselves: have they consolidated enough unprofitable brands? Have they cleaned up their balance sheets or are they still saddled with so much debt that they can’t make future investments? And above all, have they created a credible model for how to not only survive, but succeed in this competitive global market? Let me be clear: the United States government has no interest or intention of running GM. What we are interested in is giving GM an opportunity to finally make those much-needed changes that will let them emerge from this crisis a stronger and more competitive company.

The situation at Chrysler is more challenging. It is with deep reluctance but also a clear-eyed recognition of the facts that we have determined, after a careful review, that Chrysler needs a partner to remain viable. Recently, Chrysler reached out and found what could be a potential partner – the international car company Fiat, where the current management team has executed an impressive turnaround. Fiat is prepared to transfer its cutting-edge technology to Chrysler and, after working closely with my team, has committed to building new fuel-efficient cars and engines here in America. We have also secured an agreement that will ensure that Chrysler repays taxpayers for any new investments that are made before Fiat is allowed to take a majority ownership stake in Chrysler.

Still, such a deal would require an additional investment of tax dollars, and there are a number of hurdles that must be overcome to make it work. I am committed to doing all I can to see if a deal can be struck in a way that upholds the interests of American taxpayers. That is why we will give Chrysler and Fiat 30 days to overcome these hurdles and reach a final agreement – and we will provide Chrysler with adequate capital to continue operating during that time. If they are able to come to a sound agreement that protects American taxpayers, we will consider lending up to $6 billion to help their plan succeed. But if they and their stakeholders are unable to reach such an agreement, and in the absence of any other viable partnership, we will not be able to justify investing additional tax dollar to keep Chrysler in business.

While Chrysler and GM are very different companies with very different paths forward, both need a fresh start to implement the restructuring plans they develop. That may mean using our bankruptcy code as a mechanism to help them restructure quickly and emerge stronger. Now, I know that when people even hear the word “bankruptcy” it can be a bit unsettling, so let me explain what I mean. What I am talking about is using our existing legal structure as a tool that, with the backing of the U.S. government, can make it easier for General Motors and Chrysler to quickly clear away old debts that are weighing them down so they can get back on their feet and onto a path to success; a tool that we can use, even as workers are staying on the job building cars that are being sold. What I am not talking about is a process where a company is broken up, sold off, and no longer exists. And what I am not talking about is having a company stuck in court for years, unable to get out.

It is my hope that the steps I am announcing today will go a long way toward answering many of the questions people may have about the future of GM and Chrysler. But just in case there are still nagging doubts, let me say it as plainly as I can – if you buy a car from Chrysler or General Motors, you will be able to get your car serviced and repaired, just like always. Your warrantee will be safe. In fact, it will be safer than it’s ever been. Because starting today, the United States government will stand behind your warrantee.

But we must also recognize that the difficulties facing this industry are due in no small part to the weakness in our economy. Therefore, to support demand for auto sales during this period, I’m directing my team to take several steps. First, we will ensure that Recovery Act funds to purchase government cars go out as quickly as possible and work through the budget process to accelerate other federal fleet purchases as well. Second, we will accelerate our efforts through the Treasury Department’s Consumer and Business Lending Initiative. And we are working intensively with the auto finance companies to increase the flow of credit to both consumers and dealers. Third, the IRS is today launching a campaign to alert consumers of a new tax benefit for auto purchases made between February 16th and the end of this year – if you buy a car anytime this year, you may be able to deduct the cost of any sales and excise taxes. This provision could save families hundreds of dollars and lead to as many as 100,000 new car sales.

Finally, several members of Congress have proposed an even more ambitious incentive program to increase car sales while modernizing our auto fleet. Such fleet modernization programs, which provide a generous credit to consumers who turn in old, less fuel efficient cars and purchase cleaner cars have been successful in boosting auto sales in a number of European countries. I want to work with Congress to identify parts of the Recovery Act that could be trimmed to fund such a program, and make it retroactive starting today.

Let there be no doubt, it will take an unprecedented effort on all our parts – from the halls of Congress to the boardroom, from the union hall to the factory floor – to see the auto industry through these difficult times. But I want every American to know that the path I am laying out today is our best chance to make sure the cars of the future are built where they’ve always been built – in Detroit and across the Midwest; to make America’s auto industry in the 21st century what it was in the 20th century – unsurpassed around the world. This path has been chosen after consulting with other governments that are facing this crisis. We have worked closely with the Government of Canada on GM and Chrysler, as both companies have extensive operations there. The Canadian Government has indicated its support for our approach and will be announcing their specific commitments later today.

While the steps I am talking about will have an impact on all Americans, some of our fellow citizens will be affected more than any others. And so I’d like to speak directly to all those men and women who work in the auto industry or live in the countless communities that depend on it. Many of you have been going through tough times for longer than you’d care to remember. And I will not pretend the tough times are over. I cannot promise you there isn’t more pain to come. But what I can promise you is this – I will fight for you. You are the reason I am here today. I got my start fighting for working families in the shadows of a shuttered steel plant and I wake up every single day asking myself what I can do to give you and working people all across this country a fair shot at the American dream.

When a community is struck by a natural disaster, the nation responds to put it back on its feet. While the storm that’s hit our auto towns is not a tornado or a hurricane, the damage is clear, and we must respond. That is why today, I am designating a new Director of Recovery for Auto Communities and Workers to cut through red tape and ensure that the full resources of our federal government are leveraged to assist the workers, communities, and regions that rely on our auto industry. Edward Montgomery, a former Deputy Labor Secretary, has agreed to serve in this role. Together with Labor Secretary Solis and my Auto Task Force, Ed will help provide support to auto workers and their families, and open up opportunity in manufacturing communities. Michigan, Ohio, Indiana, and every other state that relies on the auto industry will have a strong advocate in Ed. He will direct a comprehensive effort that will help lift up the hardest hit areas by using the unprecedented levels of funding available in our Recovery Act and throughout our government to create new manufacturing jobs and new businesses where they are needed most – in your communities. And he will also lead an effort to identify new initiatives we may need to help support your communities going forward.

These efforts, as essential as they are, will not make everything better overnight. There are jobs that cannot be saved. There are plants that will not reopen. And there is little I can say that can subdue the anger or ease the frustration of all whose livelihoods hang in the balance because of failures that weren’t theirs.

But there is something I want everyone to remember. Remember that it is precisely in times like these – in moments of trial, and moments of hardship – that Americans rediscover the ingenuity and resilience that makes us who we are. That made the auto industry what it once was. That sent those first mass-produced cars rolling off assembly lines. That built an arsenal of democracy that propelled America to victory in the Second World War. And that powered our economic prowess in the first American century.

Because I know that if we can tap into that same ingenuity and resilience right now; if we can carry one another through this difficult time and do what must be done; then we will look back and say that this was the moment when America’s auto industry shed its old ways, marched into the future, and remade itself, once more, into an engine of opportunity and prosperity, not only in Detroit, and not only in our Midwest, but all across America.

What do you think? Comments?


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Monday, March 16, 2009

Obama Plans Small-Business Lending Boost

The Obama administration announced Monday that the 21 largest banks receiving government money must report monthly on how much lending they do to small businesses.

All other banks getting taxpayer help are being asked to report quarterly on small business loans. Even banks that are not taking government funds are being told by the administration to "make an extra effort" to increase small business lending.

The announcement was part of a broad package aimed at boosting the credit available to struggling small business owners that President Barack Obama and Treasury Secretary Timothy Geithner were unveiling in an East Room ceremony. The White House figures that making billions in federal loans available to small businesses was one way to address misgivings over the widely unpopular bailout program, which has sent hundreds of billions to large financial institutions like Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. with few strings attached.

The rescue program has appeared to do little so far to loosen credit, the lifeblood of the American economy.

In brief comments Monday morning with Geithner before the official announcement, Obama called small businesses "one of the biggest drivers of employment that we have." He said he had pressed his economic team to specifically help owners of small businesses and get credit flowing to them again, and he called the newest initiatives only a first step.

The measures includes $730 million from the stimulus plan to immediately reduce small-business lending fees and to increase the government guarantee on some Small Business Administration loans to 90 percent. The government also is taking aggressive steps to boost bank liquidity with up to $15 billion aimed at unfreezing the secondary credit market.

Often primary bank lenders will seek to sell the SBA loans in the secondary market, allowing them to use the proceeds of the sale to make new loans to other small business owners, but skittish investors have been staying away. Under the administration's initiative, the government will step in to buy these loans to help unlock the frozen credit market, using money from the recently passed bailout package in the range of $10 billion to $20 billion, one official briefed on the plan said.

While the SBA typically guarantees $20 billion in loans annually, new lending this year is on track to fall below $10 billion, according to the administration.

The reporting requirements for financial institutions receiving government bailout funds are the first, the White House said.

The plan comes amid Republican efforts to cast doubt about Obama's ambitious budget, in particular the proposal to raise taxes, starting in 2011, on individuals earning more than $200,000 and on households earning more than $250,000. Those provisions also hit small businesses.

Geithner also ordered the Internal Revenue Service to issue a series of new rules for temporary but significant tax breaks, meaning that small businesses:

_That earn up to $15 million will be allowed to claim losses for the past five years in the current tax year;

_May write off up to $250,000 in investments this year.

_Can reduce estimated tax payments to 90 percent of the previous year's filing.

_Are allowed to take larger depreciation deductions within the first year of property purchases.

_And will see 75 percent of capital gains excluded for those who invest in small businesses.

What do you think? Comments?


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Monday, March 9, 2009

Obama Opens Up Stem Cell Work, Science Inquiries


Obama ends funding ban for stem cell research

From tiny embryonic cells to the large-scale physics of global warming, President Barack Obama urged researchers on Monday to follow science and not ideology as he abolished contentious Bush-era restraints on stem-cell research. "Our government has forced what I believe is a false choice between sound science and moral values," Obama declared as he signed documents changing U.S. science policy and removing what some researchers have said were shackles on their work.

"It is about ensuring that scientific data is never distorted or concealed to serve a political agenda — and that we make scientific decisions based on facts, not ideology," Obama said.

Researchers said the new president's message was clear: Science, which once propelled men to the moon, again matters in American life.

Opponents saw it differently: a defeat for morality in the most basic questions of life and death.

"The action by the president today will, in effect, allow scientists to create their own guidelines without proper moral restraints," Family Research Council President Tony Perkins said.

In a crowded ornate East Room, there were more scientists in the White House than Alan Leshner, CEO of the American Association for the Advancement of Science had seen in his 30 years in Washington. "More happy scientists than I've seen," he added.

The most immediate effect will allow federally funded researchers to use hundreds of new embryonic stem cell lines for promising, but still long-range research in hopes of creating better treatments, possibly even cures, for conditions ranging from diabetes to paralysis. Until now, those researchers had to limit themselves to just 21 stem cell lines created before August 2001, when President George W. Bush limited funding because of "fundamental questions about the beginnings of life and the ends of science."

Science, politics and religion have long intertwined and conflicted with each other. In his actions Monday, especially with the stem cell decision, Obama is emphasizing more the science than the religion, when compared with his predecessor, science policy experts say. But they acknowledged politics is still involved.

Don't expect stem cell cures or treatments anytime soon. One company this summer will begin the world's first study of a treatment using human embryonic stem cells, in people who recently suffered spinal cord injuries. Research institutions on Monday were gearing up to ask for more freely flowing federal money, and the National Institutes of Health was creating guidelines on how to hand it out and include ethical constraints. It will be months before the stem cell money flows; the average NIH stem cell grant is $1.5 million spread out over four years.

Scientists focused on a new sense of freedom.

"I think patients everywhere will be cheering us on, imploring us to work faster, harder and with all of our ability to find new treatments," said Harvard Stem Cell Institute co-director Doug Melton, father of two children with Type I diabetes who could possibly be treated with stem cells. "On a personal level, it is an enormous relief and a time for celebration. ... Science thrives when there is an open and collaborative exchange, not when there are artificial barriers, silos, constructed by the government."

Opponents framed their opposition mostly, but not exclusively, on moral grounds and the scientifically contested claims that adult stem cells work just as well.

Said Wendy Wright, president of Concerned Women for America: "President Obama's order places the worst kind of politics above ethics. Politics driven by hype makes overblown promises, fuels the desperation of the suffering and financially benefits those seeking to strip morality from science."

In Congress, Reps. Diana DeGette, D-Colo., and Mike Castle, R-Del., said they would seek a quick vote on legislation to codify Obama's order in federal law, after failing twice in the past to overturn Bush's restrictions. DeGette said she doesn't want stem cell research to become "a pingpong ball going back and forth between administrations."

But Rep. Tom Price, R-Ga., chairman of the Republican study committee, said the president's new policy would "force taxpayers to subsidize research that will destroy human embryos." De Gette and Castle said their legislation tries to minimize destruction of embryos.

Stem cells are typically derived from fertility clinic surplus, destined for destruction.

Obama also said the stem cell policy is designed so that it "never opens the door to the use of cloning for human reproduction." Such cloning, he said, "is dangerous, profoundly wrong, and has no place in our society or any society."

In addition to the stem cell order, Obama issued a memo designed to ensure openness about scientific research and give whistleblower protection to scientists.

Promoting science "is about letting scientists like those here today do their jobs, free from manipulation or coercion, and listening to what they tell us, even when it's inconvenient — especially when it's inconvenient," Obama said.

Science and politics often conflict, said Granger Morgan, professor of engineering and public policy at Carnegie Mellon University and a former science advisory board chairman for the U.S. Environmental Protection Agency — perhaps illustrated no more wildly than in 1897 when the Indiana legislature attempted to change the mathematical concept of pi to 3.2. Science should provide the facts that politicians use for their decisions, Morgan and Leshner said.

Many scientists and environmental activists complained that the Bush administration had censored and marginalized science. That's a perception that Bush science adviser John Marburger repeatedly called untrue and unfair, as he addressed a series of occurrences that troubled critics.

In 2006, the White House edited out congressional testimony about public health effects of global warming by Centers for Disease Control and Prevention Director Dr. Julie Gerberding. A 2003 EPA global warming document was edited by nonscientists at the White House. A NASA political appointee tried — and failed — to silence the agency's top climate scientist.

Former Surgeon General Richard Carmona resigned in 2006, complaining about White House interference on global health issues: "The problem with this approach is that in public health, as in democracy, there is nothing worse than ignoring science or marginalizing the voice of science for reasons driven by changing political winds."

Obama advisers contend that all has changed. The government has already put on hold rules about scientific input on endangered species, reinstating advice that had been excised during the Bush administration.

Public policy must "be guided by sound scientific advice," said Dr. Harold Varmus, the Nobel Prize-winning co-chairman of the President's Council of Advisors on Science and Technology. The new memo Obama signed is "mainly a way of trying to prevent tampering with any advice," Varmus told MSNBC.

What do you think? Comments?


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Tuesday, February 24, 2009

Obama Vows: "U.S. Will Emerge Stronger!"

President Delivers Prime-Time Speech Before Congress

Historic speech.


President Barack Obama promised a nation shuddering in economic crisis Tuesday night that he would lead it from a dire "day of reckoning" to a brighter future, summoning politicians and public alike to shoulder responsibility for hard choices and shared sacrifice. "The time to take charge of our future is here," Obama declared, delivering his first address to a joint session of Congress.

Offering words of reassurance to an anxious nation, he declared, "Tonight I want every American to know this: We will rebuild, we will recover, and the United States of America will emerge stronger than before."

"We are a nation that has seen promise and peril," he said. "Now we must be that nation again."

Cheered robustly as he entered the House chamber, Obama grinned, shook hands and kissed lawmakers and stopped for a lengthy embrace with Supreme Court Justice Ruth Bader Ginsburg, back on the bench only this week after surgery for pancreatic cancer.
To deal with the current crisis, deepening each day, the president said more money will be needed to rescue troubled banks beyond the $700 billion already committed last year.

He said he knows that bailout billions for banks are unpopular — "I promise you, I get it," he said — but he also insisted that was the only way to get credit moving again to households and businesses, the lifeblood of the American economy.

Along with aid for banks, he also called on Congress to move quickly on legislation to overhaul outdated regulations on the nation's financial markets.

"I ask this Congress to join me in doing whatever proves necessary," Obama said. "Because we cannot consign our nation to an open-ended recession."

Thinking longer-term, Obama said in a speech lacking many specifics and devoid of initiatives that both political parties must give up favored programs while uniting behind his campaign promises to build better schools, expand health care coverage and move the nation to "greener" fuel use.

Just five weeks after his inauguration, Obama addressed an ebullient Democratic congressional majority and an embattled but reinvigorated GOP minority as well as millions of anxious viewers.

Despite the nation's economic worries and the lack of support for his plans from all but a few Republican lawmakers, Obama enjoys strong approval ratings across the nation.

Louisiana's young, charismatic governor, Bobby Jindal, delivering the televised GOP response, exhorted fellow Republicans to be Obama's "strongest partners" when they agree with him. But he signaled that won't happen much, calling Democrats in Congress "irresponsible" for passing the $787 billion stimulus package that Republicans have criticized as excessive and wasteful.

"The way to lead is not to raise taxes and put more money and power in hands of Washington politicians," Jindal said, according to excerpts of his remarks released by the Republican Party. "Who among us would ask our children for a loan, so we could spend money we do not have, on things we do not need?"

Jindal is considered a likely presidential contender in 2012.

Obama spoke as bad economic news continued to pile up, felt all too keenly in U.S. homes and businesses. Some 3.6 million jobs have disappeared so far in the deepening recession, which now ranks as the biggest job destroyer in the post-World War II period.

Americans have lost trillions of dollars in retirement, college and savings accounts, with the stock market falling nearly half from its peak of 16 months ago.
And new polls — some with his public support rising and others with it dropping — show that the political climate can be as precarious as the economic one.

Aware that his and his party's fortunes will suffer if he cannot right the economic picture, Obama sought to blend the kind of grim honesty that has become his trademark since taking office with a greater emphasis on optimism.

"The weight of this crisis will not determine the destiny of this nation," he said.

The central argument of his speech was that his still-unfolding economic revival plan has room for — and even demands — simultaneous action on a broad, expensive agenda including helping the millions without health insurance, improving education and switching the U.S. to greater dependence on alternative energy sources.

This is the big lift of his young presidency: bringing the public behind what are sure to be enormous outlays on contentious issues.

His hope was to begin to persuade the country that those longer-term items on his presidential agenda are as important to the nation's economic well-being as unchoking credit and turning around unemployment numbers.

"The only way this century will be another American century is if we confront at last the price of our dependence on oil and the high cost of health care, the schools that aren't preparing our children and the mountain of debt they stand to inherit," Obama said. "That is our responsibility."

He urged lawmakers to reduce emissions of greenhouse gases that cause climate change by creating a cap-and-trade system of limits and pollution allowances, especially for industries such as utilities with coal burning power plants.

And he said the budget he is sending to Congress on Thursday will call for $15 billion a year in federal spending to spur development of environmentally friendly but so far cost-ineffective energy sources such as wind and solar, biofuels, clean coal and more fuel-efficient vehicles.

He said his budget request also will create new incentives for teacher performance and support for innovative education programs. He asked every American to commit to completing a year or more of higher education or career training.

New in office, he wasn't charged with producing a formal State of the Union status report. But for all intents and purposes, that's what it was: a night for the president to sketch out his priorities in a setting unmatched the rest of the year.

It took nearly 15 minutes for him to make his way through a House chamber packed with lawmakers eager to welcome the nation's first black president into a Capitol built by slaves. The gallery included a special section hosted by first lady Michelle Obama in which guests were selected to serve as living symbols of the president's goals.

Cramming the floor was virtually the entire leadership of the federal government, including Supreme Court justices and all but one Cabinet member, held away in case disaster struck.

Pre-speech, Wall Street was in a better mood than it had been in for days: Stocks were up after Federal Reserve Chairman Ben Bernanke said the recession might end this year.

In contrast to many State of the Union addresses by George W. Bush, Obama did not emphasize foreign policy. He touched on his intention to chart new strategies in Iraq and Afghanistan and to forge a new image for the U.S. around the world even as he keeps up the fight against terrorism.

With the economy dominant, Obama said the mess was one he inherited. "We have lived through an era where too often, short-term gains were prized over long-term prosperity, where we failed to look beyond the next payment, the next quarter or the next election," he said.

He aimed to show he was tackling the situation with both urgency and strict oversight for how the staggering sums are being spent. The massive stimulus plan, an overhaul of the separate $700 billion bailout for the financial sector, and a $275 billion rescue for struggling homeowners are already in place, and more is on the way, Obama said.

Even as Washington pours money into the economic recovery, Obama said the budget deficit, at $1.3 trillion and ballooning, must be brought under control.

He promised he would slash it by half by the end of his term in 2013, mostly by ending U.S. combat in Iraq and eliminating some of Bush's tax cuts for the wealthy.

He said his budget officials have identified a total of $2 trillion in savings over the next 10 years, also including ending education programs "that don't work" and payments to large agribusinesses "that don't need them," eliminating wasteful no-bid contracts in Iraq and spending on weapons systems no longer needed in the post-Cold War era, and rooting out waste in Medicare.

"Everyone in this chamber, Democrats and Republicans, will have to sacrifice some worthy priorities for which there are no dollars," he said. "And that includes me."
He touted his decision to end the practice of leaving Iraq and Afghanistan war spending out of the main budget. "For seven years, we have been a nation at war. No longer will we hide its price," Obama said.

What do you think? Comments?


Tags: F&I Manager blog, Credit Repair va, Credit Repair blog, F&I laws

Saturday, February 14, 2009

Congress Trumps Obama - Cuffs CEO Bonuses

Stimulus restricts compensation, erases massive Wall Street pay packages

The stimulus package Congress passed last night imposes new limits on executive compensation that could significantly curb multimillion dollar pay packages on Wall Street and goes much further than restrictions proposed by the Obama administration last week.

The bill, which President Obama is expected to sign into law next week, limits bonuses for executives at all financial institutions receiving government funds to no more than a third of their annual compensation. The bonuses must be paid in company stock that can be redeemed only when the government investment has been repaid. With the measure, lawmakers seek to address public outrage over extravagant Wall Street paydays even as taxpayers bail out the industry.

Obama: Stimulus is a 'historic step'

Unlike the rules issued by the White House, the limits in the stimulus bill would apply to top executives and the highest-paid employees at all 359 banks that have already received government aid.

"This is a big deal. This is a problem," said Scott Talbott, chief lobbyist for the nation's largest financial services firms. "It undermines the current incentive structure."

Talbott said banking executives expected certain restrictions would be applied to them but are concerned that some of the most highly paid employees, such as top traders, who bring in hefty sums for the company, would flee to hedge funds or foreign banks that have not accepted U.S. government funds.

The White House restrictions capped executive pay at $500,000 and allowed companies to award unlimited stock. Those rules applied only to institutions that receive government funds in the future and under limited circumstances.

Significant impact seen

Bonuses make up much of financial executives' take-home pay, so the new rules could significantly diminish their compensation. For example, Goldman Sachs chief executive Lloyd Blankfein made $68.5 million in 2007 -- a Wall Street record -- but $67.9 million of that was in bonus and other incentive pay that analysts said would be subject to the new rules.

Citigroup's top executive, Vikram Pandit, has voluntarily agreed to a $1 salary until his company returns to profitability. In theory, this means that Pandit would be allowed an annual bonus of pennies.

Critics of excessive executive pay assert that companies have always found ways around compensation rules. Yesterday, they noted that more stringent measures -- such as a $400,000 cap on all forms of compensation -- did not survive last-minute wrangling by House and Senate leaders on the final compromise stimulus bill. To offset the new rules, inserted by Sen. Christopher J. Dodd (D-Conn.), compensation boards could just significantly raise the base salary of executives, the critics said.

"Congress missed a huge opportunity to set a strict and measurable limit on executive pay," said Sarah Anderson, a director at the Institute for Policy Studies in Washington. "I'm afraid companies will find ways to shift compensation to other pots and continue to make massive payouts that have so outraged the American people."

But several compensation experts said that is unlikely, given the glaring spotlight on an issue that is not expected to go away anytime soon. Excessive compensation has received increasing scrutiny as the pay gap between executives and average workers widened in recent years. Public furor reached a boiling point with news that billions of dollars in bonuses were paid to Wall Street employees last year even as the banks took billions in taxpayer bailout money.

What do you think? Comments?


Tags: F&I Manager blog, Credit Repair va, Credit Repair blog, F&I laws

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