Business life: My finance news blog

You know it at as junk mail, though the industry prefers to call it direct mail. But whatever the name, you’re getting a lot less of it.

But before you start rejoicing, think about what this means for the economy. Less junk mail means fewer companies want to sell you their services — whether that’s personalized checks or rug cleaning — which reflects wider problems in our economy.

"In one way, it’s good that we’re getting less [direct] mail," said Andrew Davidson, senior vice president with Mintel Comperemedia, a Chicago-based firm that tracks direct advertising. "On the other hand, it’s a sign that these companies, such as the card issuers and banks, are being more cautious in light of the difficult economic environment."

The credit card industry, among the most prolific of the direct-mailers, sent out 5.4 billion pieces of direct mail in 2008, down from 7.3 billion in 2007, according to Mintel. The decline became even steeper this year, with less than 900 million pieces mailed in the first six months.

The mortgage industry has also slowed down its direct mail offers of secured loans, from a peak of nearly 4 billion pieces in 2005, to about 1.1 billion pieces in 2008, according to Mintel. Only 220 million pieces have been mailed in the first six months of this year.

Kirk Swain, a partner with Directmail.com in Prince Frederick, Md., said that orders from charities and politicians have also dried up, since consumers no longer have the funds to make contributions.

"People, when they get scared, they tighten up their wallets," he said.

About the only industries still sending offers are insurers and telecommunications companies, said Davidson of Mintel. He said that "bundle" deals that include telephone, cable and Internet service remain popular, as are life and automobile insurance, which are some of the last things cash-strapped consumers will give up.

The overall decline of junk mail has pained the U.S. Postal Service, which is already billions of dollars in debt. Despite a $6 billion cost-cutting plan, the Postal Service lost $4.7 billion in the fiscal year-to-date for 2009, meaning the nine months ending on June 30. The Postal Service blames the reduction of mail volume, of which direct mail plays a major part compare car insurance prices. In fiscal year 2008, the most recent year for such data, 63% of all mail was direct advertising, according to the Postal Service.

"These are the worst trends that we’ve seen in direct mail, certainly for the last decade," said Bob Bernstock, president of shipping and mailing services for the Postal Service. "The marketing mail piece has gone from growth to decline. The economy is clearly the dominating factor."

Dr. Ramesh Lakshmi-Ratan, chief operating officer of the Direct Marketing Association, an industry trade group, expects direct mail to make a comeback over the next few years, once the economy as a whole recovers. "Do I see a good future for the Postal Service and direct mail?" he said. "Absolutely, but I think it’s going to be different."

Going forward, he projects that the direct mail industry will have less emphasis on credit and more on savings-driven spending, as consumer habits shift towards cash over credit.

Sandra Blum, the Fairfield, Conn.-based author of "Designing Direct Mail that Sells," said that direct mail is more effective than e-mail marketing because consumers have learned to delete advertising e-mails without even reading them, undermining their effectiveness.

"I think that people are hedging their bets and turning to e-mail marketing, thinking that it’s cheaper," said Blum. "But the key word is efficacy here. Believe or not, I think there’s a greater feeling of privacy [with direct mail. If [consumers] can choose when to pay attention to it, they’re tactile."

Another advantage of direct mail is that it doesn’t cost the recipient anything, unlike faxes, pre-recorded ad calls and text ads.

"Junk mail, I don’t have a problem with, honestly," said Brian Bromberg, a lawyer and member of the National Association of Consumer Advocates. "I don’t find it particularly invasive."

And while he is "happy" about getting less junk mail in his mail box, he is "unhappy that it reflects the fact that the economy has tanked." 

Source

U.S. billionaire Len Blavatnik is planning to file a lawsuit against JPMorgan Chase on Monday, accusing the bank of mismanaging an investment account that held $1 billion in assets owned by Blavatnik’s industrial holding company, Access Industries, the New York Times said.

In the proposed lawsuit, Blavatnik’s lawyers blame Ted Ufferfilge, a JPMorgan banker advising Access, for losing $98 million of the company’s money betting on risky subprime mortgage securities, according to the paper.

The proposed lawsuit contends that Ufferfilge told Access that its funds were being invested in conservative instruments, not securities that wound up at the center of the American mortgage crisis, the paper said, citing a draft of the complaint prepared by the law firm Quinn Emanuel Urquhart Oliver & Hedges.

An Access spokesman told the paper that JPMorgan bought the subprime securities for Access “at a time when the bank itself was unwinding its positions in similar investments business cards online.”

JPMorgan intends “to defend this matter vigorously,” a spokeswoman for the bank told the paper. “We believe this lawsuit is meritless and a transparent attempt to recover losses resulting from the unprecedented market downturn,” she told the paper.

The bank has hired the law firm Paul, Weiss, Rifkind, Wharton & Garrison to represent it in the case, the paper added. JPMorgan and Access Industries could not be immediately reached for comment by Reuters.

(Reporting by Chakradhar Adusumilli in Bangalore; Editing by Muralikumar Anantharaman)

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President Barack Obama Saturday proposed an additional $313 billion in cuts to Medicare, Medicaid and other programs to pay for health care reforms expected to cost about $1 trillion over the next decade.

"I know some question whether we can afford to act this year. But the unmistakable truth is that it would be irresponsible to not act," Obama said in an advance text of his weekly radio address.

Obama wants a health care reform bill on his desk by October, but faces opposition from Republicans who oppose creation of a government-run insurance plan to compete with private insurers.

Many of his fellow Democrats are wary of making deep cuts to Medicare and Medicaid, the U.S. health care programs for seniors and poor people, to pay for reforms.

With the cost of U.S. health care continuing to rise rapidly, Obama argued the country could not afford to wait another year for sweeping changes.

But he acknowledged the ambitious plan would increase government costs in the short run.

To address those concerns, Obama has pledged to come up with enough spending cuts and new revenue to pay for reforms.

"So today, I am announcing an additional $313 billion in savings that will rein in unnecessary spending, and increase efficiency and the quality of care — savings that will ensure that we have nearly $950 billion set aside to offset the cost of health care reform over the next ten years," Obama said.

About $110 billion of the new cuts would come from reducing scheduled increases in Medicare payments. That would encourage health care providers to increase productivity, White House budget director Peter Orszag told reporters loan until payday.

Obama also proposed cutting payments to hospitals to treat uninsured patients by $106 billion on the assumption those ranks would decline as health care reforms phase in.

An additional $75 billion would come from "better pricing of Medicare drugs," Orszag said, adding the White House was in talks with stakeholders over the best way to do that.

The remaining $22 billion in proposed cuts would come from smaller reforms, such as adjusting payment rates for physician imaging services and cutting waste, fraud and abuse.

The new cuts are in addition to a $635 billion "down payment" on health care reform that Obama outlined in his budget to Congress earlier this year.

About half of that came from cuts in Medicare and Medicaid and the rest from revenue proposals such as cutting tax deductions for families that make over $250,000 a year.

Altogether, the Obama administration is now asking Congress to trim spending on Medicare and Medicaid by more than $600 billion over the next decade, which is more than some Democrats are willing to swallow.

House Ways and Means Committee Chairman Charles Rangel told reporters after a closed-door meeting with fellow Democrats on the panel that the committee would include about $400 billion in Medicare and Medicaid savings in the health care overhaul legislation being drafted.

"We don’t think we can do all the things he (Obama) is recommending. … We think his 600 (billion) is our 400," Rangel told reporters. 

Source

Amid General Motors Corp.’s bankruptcy filing, a sense of relief came from local politicians and auto workers.

Analysts hadn’t expected the Wentzville plant — GM’s only facility that builds full-size vans — to be on the closure list released Monday.

Still, recent upheavals in the auto industry left workers nervous about any pending announcement.

"Obviously, there’s relief that we were on the safe list," said Tom Brune, a representative for United Auto Workers Local 2250, which represents more than 1,700 hourly workers at Wentzville. "It’s still sobering to hear the finality of the (bankruptcy) announcement."

On Monday, GM — the world’s largest automaker until Toyota overtook it last year — followed its Detroit rival Chrysler LLC and filed for Chapter 11 in a Manhattan bankruptcy court. The plan will allow GM to whittle itself into a leaner company by selling its "good" assets to a new GM and liquidating the remaining assets. The new company could be launched in 60 to 90 days.

The 100-year-old automaker will rely on $30.1 billion in financing from the U.S. Treasury to help with the restructuring process, on top of about $20 billion it already received.

The court filing listed the company as having $82 billion in assets and $173 billion in debt. It will be the fourth-largest bankruptcy ever, smaller than WorldCom but larger than Enron.

Once the sale of assets is completed, the U.S. government — which President Barack Obama called a "reluctant" shareholder — will own 60.8 percent of GM’s common stock. In exchange for this equity stake and $2.1 billion in preferred shares, the government will cancel all but $6.7 billion of debt that the automaker owes the U.S.

But the President said his administration will not control GM’s day-to-day operations and will only weigh in on major corporate decisions.

Meanwhile, the Canadian and Ontario governments will contribute $9 billion in exchange for $400 million in preferred shares and a 11.7 percent common equity stake.

The remaining owners would be the UAW-controlled retiree health care fund, which will own 17.5 percent, and then unsecured bondholders and other creditors will get the remaining 10 percent.

Meanwhile, two St. Louis companies were among GM’s top 20 unsecured creditors.

GM owes Clayton-based Enterprise Rent-A-Car more than $33 million for vehicles that Enterprise bought under a "repurchase agreement," an Enterprise spokeswoman said. The agreements called for GM to buy back the vehicles at a pre-determined price, and GM has assured Enterprise that it will honor those payments.

Maritz Inc. of Fenton, another area creditor, is owed $25.6 million. That includes bills for customer satisfaction research and "continuous improvement training" for GM dealerships, as well as for meetings, events and incentives. A company representative said Maritz is confident GM will pay its debts and continue to use the company in the future.

The precedent that Chrysler set by its own bankruptcy process has paved the way for GM, said John Pottow, a University of Michigan law professor who is an expert in bankruptcy and commercial law.

Chrysler’s bankruptcy judge approved the sale of assets to Fiat SpA on Sunday night, 31 days after Chrysler’s first filing on April 30. Pottow said that suggests GM’s 60- to 90-day goal is possible.

Months of unprecedented drops and uncertainty have delivered GM to this point.

The global economic recession, credit availability problems and low consumer confidence walloped all automakers, domestic and foreign, in late 2008 and into this year. But GM and Chrysler, criticized for portfolios laden with gas-guzzling pickups and sport-utility vehicles, were among the deepest hit. Both automakers received government loans in December payday loan.

In March, the Obama administration forced out Rick Wagoner, the automaker’s chief executive since 2000, and it gave GM a June 1 deadline to complete restructuring out-of-court or file for bankruptcy. In recent weeks, the automaker made dramatic changes that included:

— Announcing in April plans to phase out the Pontiac brand by the end of 2010.

— Notifying 1,100 "underperforming" dealerships last month that it would not renew their franchise agreements when the contracts expire next year.

— Getting concessions last week from the UAW and secured bondholders.

As part of its restructuring plan, GM also identified 12 manufacturing plants and three distribution centers it plans to close by December 2011. Two additional plants, an engine facility in Massena, N.Y., and a stamping plant near Grand Rapids, Mich., previously were named for closure.

GM already has been moving equipment and operations from the to-be-closed Grand Rapids stamping plant to Wentzville, plant manager Rex Blackwell said. He wasn’t sure how many workers will transfer from the Michigan plant but said it would be less than 30.

Unlike Chrysler, GM would not use the bankruptcy process to end dealership contracts early, but it has decided to cut about 200 more dealerships, company spokesman Terry Rhadigan said Monday. It will notify those dealers some time this week, he added.

It’s still unclear how many St. Louis area GM dealerships will be affected. GM did not release a list, saying it would let dealers decide to make their status public. It also allowed dealers to submit appeals until Sunday, Rhadigan said, but he did not have a time frame for when decisions would be finalized.

"There really isn’t very many of these reversals," but the automaker must let its dealers try, GM’s CEO Fritz Henderson said at a news conference Monday.

GM wants to have 3,600 dealerships by next year, down from more than 6,200 in 2008. Consolidation with other locations, the sale or termination of car brands and voluntary shutdowns will help to pare down the network.

The challenge facing the remaining GM dealers is convincing consumers that vehicles discounted by a financially-strapped corporation will somehow hold their value, said Erich Merkle, an auto analyst based in Grand Rapids, Mich.

"If the price is equal to another brand, then why not buy a car from a dealer who is not in bankruptcy?" he said.

Merkle predicted GM’s post-bankruptcy sales won’t follow the lead of Chrysler’s sales figures.

"The only reason (Chrysler) sales stabilized is because Chrysler is unloading its inventory" from dealers that will lose their franchises on June 9, he said.

Tony Ziegler, general sales manager at Weber Chevrolet in Creve Coeur, doesn’t think bankruptcy will discourage buyers.

Chrysler’s court process has helped the public understand bankruptcy protection, he said.

"People are figuring out that it’s not that big a deal," Ziegler said.

Warranties for new GM vehicles, like those from Chrysler, are backed by the federal government.

Ziegler worries the bankruptcy could have a short-term impact on inventory but believes GM and the auto industry will persevere. One customer, he said, has already placed an order for the Volt, the all-electric GM vehicle slated to hit showrooms in 2010.

"Nobody is walking down (Interstate 270) yet," Ziegler said. "They’re still driving. There’s still traffic out there."

Jeremiah McWilliams, and Tim Bryant of the Post-Dispatch contributed to this report.

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General Motors Corp filed for bankruptcy on Monday, forcing the 100-year-old automaker once seen as a symbol of American economic might and dynamism into a new and uncertain era of government ownership.

The bankruptcy filing is the third-largest in U.S. history and the largest ever in U.S. manufacturing.

The decision to push GM into a fast-track bankruptcy, and provide $30 billion of additional taxpayer funds to restructure the automaker, is a huge gamble for the Obama administration.

But in a sign of progress in the government’s high-stakes effort, a bankruptcy judge approved the sale of substantially all of U.S. automaker Chrysler’s assets to a group led by Italy’s Fiat SpA in an opinion filed late on Sunday.

Chrysler’s bankruptcy, also financed by the U.S. Treasury, has been widely seen as a test run for the much bigger and more complex reorganization of GM.

The GM plan is for a quick sale process that would allow a much smaller GM to emerge from court protection in as little as 60 to 90 days.

“Now the hard part begins, which is making GM and Chrysler competitive. If they don’t do that, then we’ll be doing this all over again in a few years,” said Christopher Richter, auto analyst at CLSA Asia-Pacific Markets in Tokyo.

“The immediate implication is that the companies are going to get smaller and so market share is up for grabs, which means that rivals like Toyota, Honda, Nissan and Hyundai are going to gain share no credit check payday loan.”

LIFELINE

Since the start of the year, GM has been kept alive with U.S. government funding as a White House-appointed task force vetted plans for a sweeping reorganization that will be undertaken with $50 billion in federal financing.

By taking a 60 percent stake in a reorganized GM, the Obama administration is gambling that the automaker can compete with the likes of Toyota after its debt is cut by half and its labor costs are slashed under a new contract with the United Auto Workers union.

The governments of Canada and the province of Ontario agreed to provide another $9.5 billion to GM in a late addition to the plans for the bankruptcy.

GM plans to close 11 U.S. facilities and idle another three plants. It has not provided an updated target for job cuts but had been looking to cut 21,000 factory jobs from the 54,000 UAW workers it now employs in the United States.

The UAW would have a 17.5 percent stake in the “new GM.” The Canadian government would own 12 percent and GM bondholders would get 10 percent.

RELUCTANT INVESTOR 

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Big banks aren’t the only ones with powerful lobbyists that know how to pull strings in Washington.

A possible change in how banks pay for the federal deposit insurance fund shows that policymakers haven’t forgotten about the 8,000 or so smaller financial institutions that dot the nation.

Indeed, it appears that for the first time, regulators are poised to make institutions deemed too big to fail start paying for that privilege.

The Federal Deposit Insurance Corp.’s board may vote Friday on a proposal that would change how much banks pay for deposit insurance, according to published reports. Under the proposed changes, the FDIC would assess insurance premiums based on a bank’s assets, rather than on its domestic deposits, as is the case now.

The change would save millions of dollars for small banks, which depend on deposits to fund their lending. More important, it would mean big and small banks "are paying based on the risks they pose to the insurance fund," said James MacPhee, CEO of Michigan’s Kalamazoo County State Bank.

The small bankers’ lobbying group, the Independent Community Bankers Association, has been calling for such a shift for some time, arguing that too-big-to-fail institutions such as Citigroup (C, Fortune 500) aren’t paying for the risk they pose to the stability of the system.

"The current deposit insurance premium assessment system places a disproportionate burden on community bank liquidity," the group said last December in a memo to President Obama’s transition team.

The ICBA pointed out that some big banks have foreign deposits or other funding sources they can tap for lending in the U.S. - but that don’t count against them in current insurance calculations.

If the FDIC decides to start calculating assessments based on broader asset bases, that could be a blow for big multinational banks like JPMorgan Chase (JPM, Fortune 500) and Bank of America (BAC, Fortune 500). BofA declined to comment, and JPMorgan didn’t respond to a request for comment.

The proposal comes as regulators juggle the competing demands of big and small banks, and as the industry struggles with surging loan losses and a depleted deposit insurance fund.

The FDIC’s board is scheduled to meet Friday afternoon as part of a meeting that will decide how much banks will have to pay this year to support the fund. The agency didn’t respond to a request for comment.

The fund’s balance dropped 64% last year to $19 billion, as 25 banks failed, including the costly collapse of California mortgage lender IndyMac. This year, with unemployment soaring and real estate prices in free fall, 33 more banks have failed.

But banks got good news on the assessment front Tuesday. Congress passed a bill that would more than triple the size of the FDIC’s credit line with Treasury payday advance lender.

FDIC chief Sheila Bair has said passage of that legislation would allow the agency to cut the size of a special assessment it proposed in February in response to the steep decline of the deposit insurance fund balance.

At the time, the FDIC proposed socking banks with a one-time fee equivalent to 20 cents on every $100 of deposits. But banks rebelled, with smaller institutions saying the industry was being tarred by association with the big banks that got tens of billions of dollars in taxpayer funds last fall in the Troubled Asset Relief Program.

"We have been the common sense lenders, we have paid FDIC premiums for our deposits, and we have used solid underwriting practices," MacPhee wrote in a March 2 email to Bair that was posted on the FDIC’s Web site. "For us to be asked to continue to pay for the sins of the TBTF banks is outrageous, and we request that you cancel this increased premium."

MacPhee said Wednesday that if the FDIC imposed the 20-basis-point premium as initially planned, it would wipe out half his bank’s earnings for the year. Many smaller banks also faced the possibility of being further punished as they drew in new deposits from consumers seeking the security of a well-run bank.

The smallest banks aren’t the only ones upset about the impact of higher FDIC fees. Iberiabank (IBKC), a Lafayette, La., lender that operates 150 branches and earlier this year was the first bank to repay its TARP borrowings, spelled out just how painful the increased fees would be during its first-quarter earnings conference call last month.

"As a point of reference, each one basis point increase in our assessment costs us about $400,000 on a pretax basis," Iberiabank vice president John Davis said. "While we may consider this a painful stomach virus, for some financial institutions it may potentially be a terminal illness."

Of course, the bigger banks will benefit from lower one-time assessments. JPMorgan Chase said this month in its first-quarter report with regulators that the one-time fee could set it back as much as $1.5 billion. That number stands to be lower once the special assessment is pared back.

Still, with bailout rage percolating, the small banks’ argument seems to have hit home with policymakers who want to show their priority is supporting lending on Main Street.

"There’s a pattern here of the larger institutions’ failure imposing costs on the smaller," House Financial Services Chairman Barney Frank, D-Mass., said Tuesday. "It’s our job to prevent that from happening."  

Source

and some top officials could also be at risk.

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By David Ellis, CNNMoney.com staff writer

Last Updated: May 15, 2009: 9:04 AM ET

NEW YORK (CNNMoney.com) — The nation’s leading banks may have been deemed solvent, but it remains to be seen whether top management at those firms will soon go bust.

Among the findings in its two-month long "stress test" program announced May 7, the government not only told 10 institutions to raise a total of $75 billion in additional capital, but also pushed banks to take a hard look at their leadership.

Industry regulators specifically asked banks to review both top executives and board members over the next month "to assure that the leadership of the firm has sufficient expertise and ability to manage the risks presented by the current economic environment."

Some experts suggest those remarks could foreshadow a wave of management changes.

"There is some vulnerability there," said Gary Townsend, former bank analyst and current president of the Chevy Chase, Md.-based investment adviser Hill-Townsend Capital.

Of course, when talk of management surfaces within the financial services industry, it often centers around two of its most troubled firms: Citigroup (C, Fortune 500) and Bank of America (BAC, Fortune 500).

Both companies have certainly made plenty of concessions to regulators so far this year. But with the government owning sizeable stakes in both institutions, there are expectations that the two financial giants may have to bend even further.

In the weeks leading up to the stress test results, the fate of the two firms’ CEOs — Citi’s Vikram Pandit and BofA’s Ken Lewis — was certainly a subject of much speculation.

Other analysts suspect that there could be some pressure exerted on regional lenders as well, particularly those considered by regulators to be facing a relatively severe capital shortfall. Those banks include Cleveland-based KeyCorp (KEY, Fortune 500), Cincinnati-based FifthThird (FITB, Fortune 500) and Atlanta-based SunTrust (STI, Fortune 500).

Of the 10 banks that need to raise capital after the tests, none would comment on whether any changes to top management or the board were deemed necessary.

Even before the stress tests results were published, however, the White House had already indicated that it may push some lenders to make changes either in the c-suite or the boardroom no fax pay day loan.

Not surprisingly, bank leaders are giving a lot of credibility to those threats. In March, the Obama administration ousted General Motors chief Rick Wagoner because it believed the automaker did not have a suitable long-term viability plan. Chief executives at insurer AIG as well as the twin mortgage buyers Fannie Mae and Freddie Mac were also shown the door last year after the government intervened to rescue the three firms.

More blame for the board: Still, there are those who consider an imminent wave of management shake-ups across the banking sector as remote — at least for now.

Graham Michener, a managing director at the Connecticut-based executive search and corporate governance recruiting firm RSR Partners, notes that it is not for a lack of available talent, but the fact that the government may be unwilling to make a lot of big changes in this important transition time as banks try to nurse themselves back to health.

"For the next three to six months, we will see little to no change in the senior ranks because continuity will be crucial for the success of their plans," said Michener.

Such changes, however, would hardly represent the first time that the nation’s banking industry has undergone a massive management facelift since the crisis first took hold more than a year ago.

Citigroup’s Chuck Prince and Stan O’Neal of Merrill Lynch became the first in a long line of executive casualties in late 2007 when both men were ousted from their respective firms. That was followed just months later with the departure of Wachovia’s Ken Thompson and Washington Mutual’s Kerry Killinger as part of both banks’ last-ditch efforts to turn their companies around.

Many of the recent leadership changes, however, have taken place at the board level. Earlier this year, Citigroup replaced Sir Win Bischoff with former Time Warner chief and long-time board member Richard Parsons. (Time Warner is the parent company of CNNMoney.com).

That’s not to mention last month’s high-profile decision by Bank of America shareholders to strip Ken Lewis of his title as chairman amid outrage over his last-minute purchase of Merrill Lynch.

Many experts contend that any further bank shakeup in the months ahead will happen in the boardroom.

Too cozy?: Bank of America has already indicated that the company was considering changes to its current roster of directors, which would match changes at Citigroup. Shareholders at the New York City-based bank confirmed a handful of new board members last month.

Experts argue that bank boardrooms are ripe for change, having become tainted by cozy relationships and clogged with directors who have little, if any, banking or financial experience.

Many shareholder activists and analysts cite that lack of experience with helping to create the current state of affairs at many troubled institutions.

"Why we have not wiped out the board of directors at a number of banks already is just shocking in my view," said Dick Bove, a bank analyst at Rochdale Securities. "It proves there is no accountability in banking at the board level."

Certainly many controversial directors are secure for now, having thwarted several activist shareholder challenges this proxy season.

But amid pressure from regulators and possibly even the Obama administration, it remains doubtful that the current board makeup of most troubled institutions will remain intact until next year’s annual shareholder meeting, notes Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware.

"The risks of making the changes are frankly minimal compared to the risks of not making the changes," he said. 

Source

The state could sell off the Arizona State Fairgrounds and other assets and take on more debt instead of raising taxes to help solve a $3 billion budget deficit.

Arizona Rep. John Kavanagh, R-Fountain Hills, said Thursday the Arizona House of Representatives was working on an alternative to the budget plan proposed by Gov. Jan Brewer in an effort to shore up the deficit.

Brewer wants a statewide referendum asking voters to raise sales taxes by 1 cent. Arizona currently has 5.6 percent state sales tax.

Kavanagh said the House budget plan would not have tax increases but instead could raise state debt limits and would look to sell off some assets bad credit payday loans.

That could include the state fairgrounds at Grand and 19th avenues and McDowell Road in west Phoenix.

He said the city of Phoenix has some land along Buckeye Road that could accommodate a new fairgrounds.

The state also could sell off an airport near the Grand Canyon and privatize more state prisons and corrections facilities.

The state needs to raise more revenue in order to avoid drastic cuts to a slew of programs and services, including universities and K-12 schools.

Source

Gas prices are soaring again, with local prices at the pump jumping 5 cents overnight in the Dayton area. In Ohio, all major cities saw gas prices climb Friday, with Cincinnati and Toledo seeing the largest increases with jumps of 6 cents per gallon each.

The statewide average price of gas was $1.83 on Friday, up from $1.80 a month ago, according to the AAA daily fuel gauge report.

A year ago, the price of regular gas in the Dayton area was $3 low interest personal loan.13 per gallon.

Premium gas prices also rose overnight statewide and locally as well. A gallon of premium gas in the Dayton area averages $2.02, up 7 cents overnight, but just up a penny from last month. The average local price of premium gas one year ago in Dayton was $3.46 per gallon.

Diesel prices locally remained the same overnight at $2.16 per gallon, but are down 9 cents from an average price of $2.27 a month ago. One year ago the average price of diesel fuel in Dayton was $3.61 per gallon.

In Ohio, Akron, Canton and Cleveland have the highest average gas price at about $1.84 each. Cincinnati and Columbus both have average prices of $1.83 per gallon.

Nationwide, gas is most expensive in Alaska at $2.51 and cheapest in Missouri at $1.67.

Source

U.S. President Barack Obama ordered the U.S. Treasury Saturday to implement tax cuts for 95% of Americans, fulfilling a campaign pledge he hopes will help jolt the economy out of recession.

The tax cuts are part of a $787 billion economic recovery plan passed by the Democratic-controlled Congress over Republican opposition. The aim is to put more money in the pockets of Americans and stimulate the economy by increasing consumer spending.

"I’m pleased to announce that this morning the Treasury Department began directing employers to reduce the amount of taxes withheld from paychecks, meaning that by April 1st, a typical family will begin taking home at least $65 more every month," Obama said in his weekly radio address.

"Never before in our history has a tax cut taken effect faster or gone to so many hard-working Americans," he said.

With tens of thousands of Americans losing their jobs in the midst of a global economic meltdown, Obama has said fixing the U.S. economy is his top priority. He has acknowledged that his success or failure in that will define his presidency.

Obama campaigned for the White House last year on a pledge to roll back his predecessor George W. Bush’s tax cuts on the wealthy few and implement a cut for 95% of Americans.

His announcement came a day after one of his top economic advisers, former Federal Reserve Chairman Paul Volcker, said the global economy may be deteriorating even faster than during the Great Depression of the 1930s.

Since being sworn into office on Jan. 20, Obama has sought to reassure Americans that his government is tackling the economic crisis boldly and swiftly - holding near-daily events to announce measures to stem mortgage foreclosures, prop up failing banks, rescue the ailing auto industry and drive his stimulus package through Congress.

The measures have received a mixed early reaction from gloomy financial markets uncertain whether they will succeed in arresting the downward economic spiral guaranteed unsecured personal loan.

The package includes $282 billion in tax cuts - the Republicans pushed unsuccessfully for more - and $120 billion for public works projects including highway and rail projects.

"But as important as it was that I was able to sign this plan into law, it is only a first step on the road to economic recovery," Obama said in his address.

"None of this will be easy. The road ahead will be long and full of hazards. But I’m confident that we, as a people, have the strength and wisdom to carry out this strategy and overcome this crisis," he said.

His announcement on the tax cuts capped a week that saw him sign the stimulus package into law and announce new measures to help families facing foreclosure and those struggling to make mortgage payments.

He will step up the pace next week when he holds a summit at the White House Monday to look at how to rein in the country’s ballooning deficit and bring government spending under control as the economy starts to recover.

Lawmakers, academics and business leaders have been invited to share their ideas on how to cut the $1 trillion deficit that Obama inherited along with two costly wars in Iraq and Afghanistan.

Obama will follow the summit with a major speech Tuesday to a joint session of Congress in which he will lay out his domestic and foreign policy agenda. Inevitably, the economic crisis will loom large.

After a short breather Wednesday to host a concert honoring Stevie Wonder, Obama Thursday will unveil his proposed budget for the 2010 fiscal year, which will reflect the big increases in public spending as part of the economic recovery plan. 

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