Badlands Journal
The Ol' Shrimp Slayer's voodoo home mortgage bill...Badlands Journal editorial board
At first, when we received a press release from Rep. Dennis Cardoza, Shrimp Slayer-Maryland, about reducing mortgage payments and, in general, solving the entire recession/depression, we were impressed and willing to applaud the effort. Later, we read the bill, or, more correctly, we tried without success to read and understand the bill, H.R. 230. Our failure derives no doubt from our residence in Merced, in the 18th congressional district of California, rather than in Annapolis, in the 3rd congressional district of Maryland. Although last night we spied a UC Merced student in a supermarket line with a T-shirt announcing, "I know something you don't know...UC Merced 2006-2007," we didn't think the video buyer would be able to help us understand Cardoza's bill, so we didn't ask him what he thought this section might have meant:
  (e) Securitization-
(1) REQUIREMENT- Each enterprise shall, upon such terms and conditions as it may prescribe, set aside any qualified mortgages purchased by it under this section and, upon approval of the Secretary of the Treasury, issue and sell securities based upon such mortgages set aside.
(2) FORM- Securities issued under this subsection may be in the form of debt obligations or trust    certificates of beneficial interest, or both.
(3) TERMS- Securities issued under this subsection shall have such maturities and bear such rate or rates of interest as may be determined by the enterprise with the approval of the Secretary.
(4) EXEMPTION- Securities issued by an enterprise under this subsection shall, to the same extent as securities which are direct obligations of or obligations guaranteed as to principal and interest by the United States, be deemed to be exempt securities within  the meaning of laws administered by the Securities and Exchange Commission.
We also noticed certain disjunctions between the press release and the bill, particularly the term of the mortgages, which in the propaganda is presented as 30 years, in the bill 30-40 years. We figured Cardoza's flak didn't understand the bill either.
Conservatively, not counting lobbyists and ideological sectors for example, we figure finance, insurance and real estate special interests (FIRE) contributed $150,000 to Cardoza's unopposed reelection campaign. Agribusiness contributed $285,000. If you consider that agribusiness is a major real estate interest in itself, the real FIRE figure rises.
While we agree that the housing crisis certainly appears to be at the "heart of the economic downturn," particularly in California where any economic activity but homebuilding has been strangled in its crib for the last 25 years, we suspect the truth is a bit more complicated. California is upside-down on its mortgages because of the greatest speculative bubble in real estate history, a bubble that included speculation in a wide array of "securitization products" created by FIRE special interests. We also recall that Cardoza, both in the state Legislature and later in Congress, was one of the nation's leading cheerleaders for this speculative feeding frenzy, which has busted, leaving his California district leading the nation in per capita rates of foreclosure. Cardoza left his district for more sophisticated company in Maryland, taking with him his wife, one of those terribly scarce Valley physicians he is always babbling about as he foments the need for a medical school for UC Merced.
But, why did the speculative bubble in real estate, bound as all bubbles are to crash, begin? We doubt that the mortgage disaster is actually the fundamental cause of the recession/depression or that this bill approaches the real economic crisis. The real job is to get more money very quickly into the hands of people losing their shelter and livelihood, and get it out of the hands of banks, which seem to hoard it rather than lend it. We've never been convinced -- and lately are becoming extremely skeptical -- that high real estate values are in pursuit of happiness except for FIRE special interests. We aren't convinced that the Common Good in this community is best served by a wealthy realty sector, Main Streets full of antique franchises, and empty food-processing plants on the outskirts. We doubt the proposed WalMart distribution center, or its educational equivalent, UC Merced, are worth the threats to health and public safety -- the former for air pollution, the latter for pollution of a more subtle kind, an intellectual pollution that constantly takes the civic mind off its problems and prospects, drowning it in self-serving UC propaganda.
Thanks in large part to leadership like Cardoza of Maryland's, the economy of the 18th CD has been rendered as incomprehensible to its citizens as his H.R. 230.
The whole gutted real estate bubble in the 18th CD was fueled by speculation at every level -- from the home buyer to the foreign bank who bought the sliced-and-diced mortgage securities. The entire speculation was driven locally by a few developers and large landowners, ever rapacious and idiotic local land-use authorities, politicians at every level of government, and outside FIRE special interests that had absolutely no care for our economy. And still don't. These speculative bubbles rage on as the finance sector continues to destroy every shred of a real economy in its path. Cardoza's bill is as self-serving for himself and his little group of plutocratic special interests as has been his wholesale attack on the environment of his rotten bourough, where we live.
Cardoza of Maryland raised more than a million dollars in the 2007-2008 fund-raising cycle and spent more than $930,000. Having no opposition, he's become nothing but a Blue Dog bagman, a money funnel. Cardoza is irrelevant to the 18th CD and the 18th CD is irrelevant to him. His unopposed reelection last year suggests the entire political leadership of his district is equally irrelevant to the time and to the needs of the district's citizens. This is just a little crowd that rode the speculative bubble up and are doing nothing but trying to hold onto wealth and office.
Rep. Dennis Cardoza website
Congressman Cardoza introduces bill to reduce mortgage payments, stabilize housing crisis
WASHINGTON, DC -- Congressman Dennis Cardoza introduced legislation Wednesday that seeks to reverse the housing crisis by significantly reducing homeowners’ mortgage payments. Under the Housing Opportunity and Mortgage Equity (HOME) Act, all current homeowners and qualified borrowers could receive a fixed 4-percent interest rate with a fixed 30-year term. 
“Plain and simple, at the root of this recession is the nation’s housing crisis,” said Congressman Cardoza. “We cannot continue to throw money into the wind in hopes of turning our economy around. We must strike at the heart of the economic downturn and that means taking far-reaching action to reverse the housing crisis.”
Congressman Cardoza said the legislation would benefit all homeowners and would-be owners. Many homeowners have faithfully paid their bill each month but have not been able to refinance their mortgage due to lost equity. Other homeowners are struggling to meet their payments. Such homeowners, and buyers, would be assisted through the legislation.
Last year, the federal government became the conservator of mortgage holders Fannie Mae and Freddie Mac. Congressman Cardoza’s legislation would use the conservatorship of Fannie and Freddie to purchase mortgages from lenders who are willing to refinance or offer home loans at a 4-percent rate with 30-year terms. Many have suggested that such a method provides the greatest value to the taxpayer when compared to other stimulus and tax-cut programs being considered.
“Such government intervention would have been unimaginable a year ago,” said Congressman Cardoza of his legislation. “However, we have reached a situation where such action is vital. This legislation provides direct benefit to the economy, to homeowners and to banks.  And it’s the only economic stimulus package that will provide the long-term housing and economic stabilization this country needs.”
Library of Congress: Thomas
Housing Opportunity and Mortgage Equity Act of 2009 (Introduced in House)
HR 230 IH
1st Session
H. R. 230
To prevent foreclosure of home mortgages and increase the availability of affordable new mortgages.
January 7, 2009
Mr. CARDOZA introduced the following bill; which was referred to the Committee on Financial Services
To prevent foreclosure of home mortgages and increase the availability of affordable new mortgages.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
This Act may be cited as the `Housing Opportunity and Mortgage Equity Act of 2009'.
(a) Authority- The Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation shall each carry out a program under this section to purchase and securitize qualified refinancing mortgages and qualified new mortgages on single-family housing, in accordance with this section and policies and procedures that the Director of the Federal Housing Finance Agency shall establish.
(b) Purchase of Qualified Mortgages-
(1) REQUIREMENT TO PURCHASE- If a lender proffers to an enterprise, in accordance with requirements established by the Director, a mortgage or mortgages for purchase under this section, the enterprise shall make a determination of whether such mortgage or mortgages are qualified mortgages. Subject to subsection (g), if the enterprise determines that such mortgage or mortgages meet the requirements for qualified mortgages, the enterprise shall make a commitment to purchase, and shall purchase, the mortgage or mortgages.
(2) ADVANCE COMMITMENTS- The Director shall require each enterprise to establish a procedure for approval of lenders to receive commitments, in advance of the origination of qualified mortgages, for purchase of such mortgages under this section by the enterprise.
(c) Qualified Mortgages-
(1) QUALIFIED MORTGAGE- For purposes of this section, the term `qualified mortgage' means a mortgage that is a qualified refinancing mortgage or a qualified new mortgage.
(2) QUALIFIED REFINANCING MORTGAGE- For purposes of this section, the term `qualified refinancing mortgage' means a mortgage that meets the following requirements:
(A) SINGLE-FAMILY HOUSING- The property subject to the mortgage shall be a one- to four-family dwelling, including a condominium or a share in a cooperative ownership housing association.
(B) PRINCIPAL RESIDENCE- The mortgagor under the mortgage shall occupy the property subject to the mortgage as his or her principal residence.
(C) REFINANCING- The principal loan amount repayment of which is secured by the mortgage shall be used to satisfy all indebtedness under an existing first mortgage that--
(i) was made for purchase of, or refinancing another first mortgage on, the same property that is subject to the qualified refinancing mortgage; and
(ii) was originated on or before January 1, 2008.
(D) INTEREST RATE; TERM TO MATURITY- The mortgage shall--
(i) bear interest at a single rate that is fixed for the entire term of the mortgage, which shall not exceed 4.0 percent annually; and
(ii) have a term to maturity of not less than 30 years and not more than 40 years from the date of the beginning of the amortization of the mortgage.
(E) UNDERWRITING STANDARDS- The mortgage shall meet such underwriting standards as the Director shall require.
(F) WAIVER OF PREPAYMENT PENALTIES- All penalties for prepayment or refinancing of the underlying mortgage refinanced by the mortgage, and all fees and penalties related to the default or delinquency on such mortgage, shall have been waived or forgiven.
(3) QUALIFIED NEW MORTGAGE- For purposes of this section, the term `qualified new mortgage' means a mortgage that meets the following requirements:
(A) TERMS- The mortgage meets the requirements under subparagraphs (A), (B), (D), and (E) of paragraph (2).
(B) HOME PURCHASE- The principal loan amount repayment of which is secured by the mortgage shall be used to purchase the property that is subject to the qualified new mortgage.
(C) NEW MORTGAGES- The mortgage was originated on or after the date of the enactment of this Act.
(d) Exceptions to Underwriting Standards- Each enterprise shall establish such exceptions to the underwriting standards of the enterprise, including downpayment and credit rating standards, that conform to the underwriting standards established pursuant to subsection (c)(5), as may be necessary to allow the enterprise to purchase and securitize qualified refinancing mortgages and qualified new mortgages under this section, in accordance with such requirements as the Director shall establish.
(e) Securitization-
(1) REQUIREMENT- Each enterprise shall, upon such terms and conditions as it may prescribe, set aside any qualified mortgages purchased by it under this section and, upon approval of the Secretary of the Treasury, issue and sell securities based upon such mortgages set aside.
(2) FORM- Securities issued under this subsection may be in the form of debt obligations or trust certificates of beneficial interest, or both.
(3) TERMS- Securities issued under this subsection shall have such maturities and bear such rate or rates of interest as may be determined by the enterprise with the approval of the Secretary.
(4) EXEMPTION- Securities issued by an enterprise under this subsection shall, to the same extent as securities which are direct obligations of or obligations guaranteed as to principal and interest by the United States, be deemed to be exempt securities within the meaning of laws administered by the Securities and Exchange Commission.
(5) PRINCIPAL AND INTEREST PAYMENTS- Mortgages set aside pursuant to this subsection shall at all times be adequate to enable the issuing enterprise to make timely principal and interest payments on the securities issued and sold pursuant to this subsection.
(6) REQUIRED DISCLOSURE- Each enterprise shall insert appropriate language in all of the securities issued under this subsection clearly indicating that such securities, together with the interest thereon, are not guaranteed by the United States and do not constitute a debt or obligation of the United States or any agency or instrumentality thereof other than the enterprise.
(f) Federal Reserve Financing Facility- The Board of Governors of the Federal Reserve System shall establish a credit facility of the Federal Reserve System to make credit available to the enterprises at interest rates comparable to rates on securities issued by the Secretary of the Treasury under chapter 31 of title 31, United States Code, and having comparable terms, as determined by the Board.
(g) Termination- The requirement under subsection (b)(1) for the enterprises to purchase mortgages shall not apply to any mortgage proferred to an enterprise after December 31, 2010.
For purposes of this Act, the following definitions shall apply:
(1) DIRECTOR- The term `Director' means the Director of the Federal Housing Finance Agency.
(2) ENTERPRISE- The term `enterprise' means the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.
(3) SECRETARY- The term `Secretary' means the Secretary of the Treasury.
Merced Sun-Star
Central Valley leaders seek funds for transportation, air quality in Washington, D.C.
San Joaquin Valley leaders are stepping up requests from state and federal officials for transportation and air quality money.
Members of the Valley's Policy Council last year lobbied for a day in Sacramento. They plan to spend two days this week at the state Capitol and will add a trip to Washington, D.C., in February.
"We are learning that the eight counties have a much greater impact together," said Merced City Councilman Bill Spriggs in a news release. "By leveraging our swing vote position we can get things done politically as a region that none of the eight counties can get done individually."
Lobbying delegates support lowering the threshold for road tax passage from two-thirds' voter approval, or 66.67 percent, to 55 percent.
Delegates support raising the state gas tax and want to see an air quality enterprise zone established in the valley to bring more state and federal funding. They also favor relaxing environmental regulations for transportation projects that reduce climate-changing emissions.
Statewide, students urged to try UC Merced
Small campus offers drawbacks, advantages...ROBERT FATURECHI, The Sacramento Bee
Just hours after the University of California regents cut 2,300 freshman spots for next fall, Patricia Fels -- a counselor at Sacramento Country Day School -- asked a class of some 15 graduating seniors to raise their hands if they'd be willing to attend UC Merced, assuming they were rejected everywhere else.
One lonely hand rose.
Raise your hand if you've ever visited UC Merced, she asked.
Not a hand.
Have any of you even visited the Web site, she pleaded.
Such have been the challenges administrators at the University of California's newest campus have faced since opening their doors in 2005. Many graduating seniors are automatically writing off the small Central Valley campus.
With the university system facing deep funding cuts, this year might be different. While spots at several of the more popular campuses are being slashed, UC Merced will be expanding its freshman enrollment.
UC-eligible seniors who are rejected at other campuses will likely be offered a spot at Merced, forcing many with their hearts set on a four-year UC education to take a second look.
According to numbers released last week, UC Merced took in just 9,065 freshman applications for fall 2009, slightly fewer than last year and less than half as many as UC Riverside, previously the least popular UC campus.
"The biggest challenge is getting folks here and explaining who we are," said Kevin Browne, associate vice chancellor for enrollment. "We just want a chance to tell our story. If you want to go surfing every morning, we're not the best choice but I'm not sure that's the best filter for your college selection process...
Modesto Bee
December existing home sales rise by 6.5 percent...ALAN ZIBEL, AP Real Estate Writer
WASHINGTON -- Sales of existing homes posted an unexpected increase last month, closing out the worst year for the U.S. real estate market in more than a decade.
The National Association of Realtors said Monday that sales of existing homes rose 6.5 percent to an annual rate of 4.74 million in December, from a downwardly revised pace of 4.45 million in November.
The results were better than expected. December's sales had been forecasted to fall to a pace of 4.4 million units, according to Thomson Reuters.
Buyers were taking advantage of dramatically lower prices, especially in distressed markets like California, Florida and Nevada, where foreclosures have swamped the market.
The nationwide median sales price plunged to $175,400, down 15.3 percent from $207,000 a year ago. That was the lowest price since May 2003 and the biggest year-over-year drop on records going back to 1968.
"The economy just simply cannot recover as long as home prices continue to decline," said Lawrence Yun, the trade group's chief economist, who called on lawmakers to include tax credits for home buyers in the economic recovery package being considered by Congress.
For all of 2008, there were 4.9 million existing home sales, down more than 13 percent from a year earlier, and the lowest total since 1997.
And another encouraging sign - the number of unsold homes on the market in last month fell nearly 12 percent to 3.7 million. At the current sales pace, it would take 9.3 months to sell all the properties, down from 11.2 months in November.
UC should keep Merced med school planning on track...Editorial
Lt. Gov. John Garamendi has offered an intriguing idea to fast-track the medical school proposed for the University of California at Merced. Garamendi's option, or a variation on it, might make sense because the UC administration is considering a slowdown of the planning for the medical school because of the economic downturn.
Garamendi, a member of the UC Board of Regents, thinks his plan will gain support because it's less expensive and would turn out doctors much more quickly than the current medical proposal. He will ask that it be discussed at the regents' meeting early next month.
We strongly support a medical school in the San Joaquin Valley, and we are seriously concerned about the prospect of UC letting the proposal go dormant or die.
A medical school will still be needed long after the current economic troubles have passed. Delaying it will only make it more costly. Furthermore, regents and the UC system leadership need to realize that more physicians are needed throughout the state. The shortage is particularly acute here in the valley, but California is not producing anywhere near the number of physicians that its growing population needs.
A med school has long been discussed as part of a valley UC campus, according to Garamendi. But, as we all know, UC has long neglected the valley and regents built a campus in Merced only after intense pressure from those living in the region. What we have today is a partially built campus, and that's not enough. UC leaders must make a stronger commitment to funding ongoing operations and enhancing programs, including a medical school.
While we aren't ready to fully endorse Garamendi's specific idea, we think it deserves serious discussion. He suggests a curriculum in which high school graduates could earn medical degrees in as little as five years. He said the program could be ready to go by the fall of 2010, which is three years sooner than the current plan.
Across the country, a number of highly regarded institutions have six- or seven-year programs. These accelerated programs have gained popularity because they allow would-be physicians to complete their education in less time and, therefore, at less cost, without sacrificing quality. The enormous expense of medical school is deterring some capable people from medical careers.
Reps. Dennis Cardoza, D-Merced, and Jim Costa, D-Fresno, are actively behind a valley medical school and they've lined up some influential valley leaders to promote it, including Bill Lyons of Modesto. Strong leadership and strong support on campus will be essential to getting this school established.
The bottom line: The valley desperately needs more doctors, as do other areas of California. Planning for the UC Merced medical school should not be derailed or delayed.
Sacramento Bee
Court rules for worker over retaliation...Associated Press Writer
WASHINGTON -- The Supreme Court ruled unanimously Monday that workers who cooperate with internal investigations of retaliation by their employers are sheltered by federal laws prohibiting job discrimination.
In the opinion, the justices held that a longtime school system employee in Tennessee can pursue a civil rights lawsuit over her firing.
The court voted to reverse the 6th U.S. Circuit Court of Appeals' ruling that the anti-retaliation provision of Title VII of the 1964 Civil Rights Act does not apply to employees who merely cooperate with an internal probe rather than complain on their own or take part in a formal investigation.
"The question here is whether this protection extends to an employee who speaks out about discrimination not on her own initiative, but in answering questions during an employer's internal investigation. We hold that it does," Justice David Souter said for the court.
Vicky Crawford was fired in 2003 after more than 30 years as an employee of the school system for Nashville, Tenn., and Davidson County.
She did not file a complaint about harassment by a school official. But she said she had been subjected to unwanted sexual advances when she was interviewed by investigators for the school system who were looking into other employees' allegations against the director of employee relations.
Crawford related instances in which the school district's employee relations director, Gene Hughes, allegedly put his crotch up to her office window and entered her office, grabbed her head and pulled it to his crotch, Souter said in his opinion.
The school system took no action against Hughes. Crawford was fired months later.
She filed a federal lawsuit, but it was dismissed by a federal judge and upheld on appeal.
The Bush administration backed Crawford in her appeal to the Supreme Court.
The school system and business interests argued that if employees like Crawford are covered by Title VII's anti-retaliation provisions, employers will refrain from launching internal investigations.
"The argument is unconvincing," Souter said. Employers already have strong incentives to "ferret out" discriminatory activity as a way to limit their liability, he said.
The civil rights law's anti-retaliation section protects employees who complain about, or oppose, discrimination as well as those who participate in formal investigations. The court limited its ruling to the opposition clause and did not pass judgment on whether Crawford also is protected under the participation clause.
The school system has said that Crawford was fired over charges of irregularities in her job as payroll coordinator. It also has other arguments defending itself from the retaliation claim. The case is being sent back to the appeals court to consider those issues.
The case is Crawford v. Metropolitan Government of Nashville and Davidson County, Tenn., 06-1595.
Editorial: Gambling is not a sure bet for state
Deals that Gov. Arnold Schwarzenegger negotiated with Indian gambling tribes have not produced the huge increases in revenue the governor predicted. Indian gambling will bring $362 million into the state general fund this year, $123 million less than expected. It will bring an estimated $392 million next year, $192 million less than the governor's rosy forecast.
Like other parts of the economy, gambling is feeling the impact of the economic downturn. As The Bee's recent stories show, the signs of distress can be seen everywhere. In Placer County, the Auburn Indian Community stopped work last month on the $1 billion expansion of its Thunder Valley Casino. A casino spokesman told The Bee that customers are not spending as much as they used to. The general manager for the Cache Creek Indian Casino in Yolo County acknowledged a "noticeable drop in spending" by customers there, as well.
No doubt both casinos are feeling the impacts of competition from the newly opened Red Hawk Casino in El Dorado County, but more than competition is at play here. The recession is forcing everyone, including gamblers, to pull back on discretionary spending.
Indian casinos are not the only gambling ventures feeling pinched. California lottery sales have dropped $600 million – almost 17 percent – over the last two fiscal years. That decline is particularly worrisome because the lottery is expected to be a key part of any state budget deal.
Under the governor's plan, California voters would approve a glitzier, more lucrative lottery. Investors would loan the state $10 billion over two years, with the loans secured by future lottery revenue.
But the lottery deal is dependent on a still very-fragile bond market and on a gambling industry that looks a lot less like a sure bet than it did even a few months ago.
Surely lawmakers can do better. California needs something more substantial than a future built on slot machines and lottery tickets.
Dan Walters: Pension fund setbacks will hit taxpayers hard
There is an unfortunate parallel between the ups and downs of the state budget and the condition of both state and local public employee pension funds.
When the economy is humming and revenue is pouring into the state treasury, pension fund investments often rack up big gains. And just as revenue windfalls induce politicians to raise spending or cut taxes with little thought to the long-term consequences, retirement fund gains often result in fattening pension benefits.
When the economy sours, as it has been doing lately, it not only slashes revenue for state and local governments but adversely affects pension fund earnings, and already-strapped state and local governments must increase payments to maintain benefits.
That double-whammy is hitting California now. Not only is the state budget awash in red ink, facing multibillion-dollar deficits, but local governments are feeling the pinch, and pension funds, having seen big investment losses, are telling governments to prepare for sharp increases in contributions next year.
The California Public Employees' Retirement System, which covers state workers and many local government employees, has lost nearly a third of its value, thanks to stock market reverses and real estate losses, including a billion-dollar haircut in one land investment. The University of California's independent pension fund has also been clobbered, as well as the California State Teachers' Retirement System and many locally managed public pension funds.
The bite has been much deeper than it otherwise would be because during the last decade, state and local politicians – responding to pressure from powerful public worker unions – sweetened pension benefits markedly.
The San Jose Mercury News reported, for instance, that San Jose's pension costs for police and fire personnel have grown by 167 percent since 2000, thanks to much-improved benefits, twice as much as costs for civilian city workers.
About 10 years ago, the state boosted its police and fire pension benefits to as much as 90 percent of salary on CalPERS' assurances that it could do so without incurring new costs to taxpayers. Most local governments followed suit. Now, the higher benefits and lower investment earnings are hitting everyone hard.
The governor's new budget contains an extra $95 million to shore up the University of California pension system. Journalist Ed Mendel, writing on his Web site Calpensions.com, says a "smoothing" policy adopted by CalPERS a few years ago will soften its bite somewhat, but when it hits next year, it still could boost taxpayer costs by roughly a quarter unless there's a big rebound in the stock market.
One wonders how long taxpayers, many of whom are seeing reductions in their incomes and watching their 401(k) pension funds wither, will tolerate new taxes or reductions in other spending to prop up public pensions that are much more generous than their own.
Sierra Club's lawsuit misguided...Alfred "Bud" Nobili, Roseville chairman, Regional University Committee...Letters to the editor
Re "Sierra Club sues Placer over land approval for university" (Our Region, Jan. 9): It is interesting that the Sierra Club does not recognize either the importance of a regional university in Placer County or the fact that the landowners and planners have gone beyond expectations in meeting county requirements for approval of plans for the project.
And, it's a shame that the Sierra Club continues to use divisive tactics to halt an important project that will benefit our region for years to come.
Community leaders throughout Placer County and greater Sacramento have fully supported the Regional University project from the very beginning, and it's exciting to see a prestigious university like Drexel prepared to step forward and be ready to share this dream by building a private university.
In addition to donating land for a private university, landowners are also donating land that can be sold to fund the construction of a first- class university. In these trying economic times, this is an opportunity we cannot afford to squander.
Let's not be fooled by Sierra Club claims of "leapfrogging" and failure to address environmental issues. These issues have been addressed in the approval process and it is clear that the Regional University project should move forward.
California unemployment fund nearly out of money...Andrew McIntosh
For the second time in five years, the state Unemployment Insurance Trust Fund is set to go broke – big time broke.
The fund that pays benefits of up to $450 a week to the jobless sank into the red for the first time in its 60-year history in 2004. California borrowed $214 million from the federal government to continue paying benefits.
With surging unemployment in California driving more people to its rolls, the fund now pays out up to $34 million a day in benefits to the state's unemployed.
This week – possibly even by today – the fund will run out of money, and then will have to rely on a $1.84 billion federal government loan to pay benefits through March.
Proposals to fix unemployment insurance – a benefit whose history dates to the Great Depression of the 1930s – have so far gained little traction. Yet experts argue that without a serious overhaul, California's fund is careening toward a $2.4 billion deficit this year and a $4.9 billion shortfall by 2010.
That could cost taxpayers and businesses in the state millions of dollars in interest on the federal loans.
State legislators are debating a variety of solutions, including larger federal loans, raising payroll taxes for employers by up to 95 percent and cutting benefits by as much as 10 percent for unemployed workers, the latter two options by 2010.
A bill now in the Assembly – ABX3 23 – seeks to grab $900 million in federal funds that may become available, a move groups like the California Chamber of Commerce and the California Manufacturers and Technology Association applaud. But the groups say boosting eligibility for benefits – as the Assembly bill proposes – is unrealistic when California's fund is broke.
The fund's current troubles have been brewing for years.
Legislative Analyst Elizabeth Hill and the California Budget Project, a Sacramento nonprofit group, forecast four years ago that red ink loomed if the fund's "precarious" finances weren't fixed.
"Any economic disruption and corresponding spike in unemployment could plunge the program into insolvency," Hill warned in a report.
Jean Ross, executive director of the budget project, said the fund collects too little payroll tax from the companies that pay for the benefits. Tax rates haven't been raised in decades, she said.
In a fast-rising unemployment situation, Ross said, benefit payments to the jobless quickly exceed payroll tax revenue coming in because legislators voted to boost benefits earlier this decade without matching tax increases.
"There's been an understanding for a long time, the revenue side of this equation needs to be fixed," Ross said.
Policy analysts like Ross and Maurice Emsellam, an Oakland analyst with the National Employment Law Project, which lobbies for better benefits for unemployed workers, have proposed several ideas to stabilize the UI fund and build future surpluses.
But the proposals call for increased contributions from employers – and Ross and Emsellam admit that's something many politicians and business groups find unpalatable.
The California Chamber of Commerce believes fraud contributes to the fund's financial problems. It wants the state to aggressively pursue people it says are taking advantage of the system.
California employers pay for unemployment insurance with a flat tax based on the first $7,000 in wages to each worker, a base set on 1983 pay scales. The maximum paid: $434 per employee, per year.
Forty-two states tax more than the first $7,000 of income, with some taxing as much as the first $30,000, according to a paper written for legislators in November. Last fall, Gov. Arnold Schwarzenegger proposed raising it to $10,500, boosting the maximum tax a business would pay to $850 a year per employee, starting in 2010.
Jason Schmelzer, policy analyst for the California Chamber of Commerce, declined to comment on the proposals. But he said the business group advocates a cautious approach to fixing the fund's finances. That includes a comprehensive look at tax rates and eligibility for benefits, he said.
"We don't want to be in a situation where we fix the fund only to have unemployment worsen and we're right back into insolvency," he said.
The governor also proposed that unemployed workers get 45 percent of their weekly pay instead of the current 50 percent, starting in 2010. That would save $200 million a year.
For example, a worker who earned $700 a week and lost his job now gets a $350 weekly check. Under administration proposals, that would drop to $315 in January 2010. Workers earning $52,000 or more a year won't be affected. For them, the $450 maximum weekly benefit would be unchanged.
Democrats oppose the benefit cuts. And they want tax increases to be adopted now, not 2010 as the governor has proposed, according to a Democratic strategist involved with crafting unemployment insurance legislation.
Democrats are expected to unveil a bill soon that will include boosting the taxable wage base to somewhere in the $14,000 to $15,600 range, said the strategist, who requested anonymity because he was not authorized to publicly discuss the measure.
Schmelzer of the state chamber of commerce said the system would have more money if it more aggressively attacked fraud as part of the solutions.
Between 2004 and 2007, documents show, the Employment Development Department, which administers the unemployment insurance fund, identified $398.5 million worth of fraud. EDD said it recovered $296.9 million worth of fraudulent overpayments in the period.
Still, fraud prosecution is rare. Only 68 criminal cases have been filed since 2004, the documents show.
In Roseville, Craig Falk, who owns a home health care business, said the system hurts businesses. Last summer, he said he fired a worker for repeated, unjustified absenteeism. The person later obtained unemployment benefits. Falk said it has happened several times – and costs him money.
"That's not what it's for," Falk said. Employers are assigned a tax "contribution rate" yearly based on how much benefits were paid to their former workers compared to their annual base payroll.
According to EDD, 216,129 people were fired and secured benefits in 2007.
EDD spokeswoman Loree Levy said eligibility for benefits is governed by state law, regulation and court cases. Each case is different, and workers who quit or are dismissed may in some cases receive benefits.
Home Depot to cut 7,000 jobs, close Expo chain...AP Retail Writer
CHICAGO -- Home Depot Inc. plans to eliminate 7,000 jobs while closing four dozen stores under its smaller home improvement brands as the recession continues to batter the nation's housing market. Its shares climbed more than 5 percent in morning trading.
The nation's biggest home improvement retailer said Monday the cuts will affect about 2 percent of its 300,000 workers and cause the Atlanta-based chain to record a $532 million pretax charge, most of which will be recorded in the fourth quarter.
Most of the cuts affect workers at Home Depot's 34 Expo Design Centers, five YardBIRDS, two Design Centers and HD Bath, a bath remodeling business with seven sites.
Those stores will close in the next two months.
Home Depot said its Expo business, which sells everything from throw pillows and sconces to bathtubs and vanities, hasn't performed well financially, even during the recent housing boom. It said the chain has weakened significantly in the current economic environment.
"Exiting our Expo business is a difficult decision, particularly given the hard work and dedication of our associates in that business and the support of our loyal customers," Chairman and Chief Executive Frank Blake said in a statement. "At the same time, it is a necessary decision that will strengthen our core Home Depot business."
The company's core Home Depot stores won't be affected
Home Depot's plans also include 2,000 cuts to non-store jobs, including 500 workers in its corporate headquarters, while freezing the pay of its officers.
Home Depot said it would record an additional $163 million in pretax fourth-quarter charges along with a $55 million post-tax charge related to the 2007 sales of HD Supply.
Meanwhile, the retailer also updated its 2008 guidance, saying it expects sales to fall 8 percent for the year while profit tumbles 24 percent when it releases fourth-quarter and full-year results on Feb. 24. Neither figures take into account the charges announced Monday.
Analysts expect the company to earn 16 cents per share on revenue of $14.8 billion for the fourth quarter.
In 2009, the chain said it expects sluggish sales to continue and plans to reduce capital spending by about $1 billion. It will open 12 stores this year.
Home Depot shares climbed $1.16, or 5.3 percent, to $22.88 in early trading Monday.
Manteca Bulletin
Manteca foreclosures up 189%
One in five Lathrop homes taken back by lenders...Dennis Wyatt
Four perspective buyers within 10 minutes Saturday pulled up to the California flat-top at 921 Marin in the Powers Tract neighborhood sandwiched between Manteca High and Spreckels Park.
The home is heading for auction next month. It is a three bedroom, one bathroom house with 1,094 square feet listed for $109,900. The roof was new within the past several years. The buyer who lost the home to foreclosure had given it fresh paint, added a water filtration system, put in custom concrete, wrought iron fencing with a security gate, added Pergo flooring and upgraded landscaping.
One gentleman, clutching a list of auction homes, declined to give his name but said he figured 2009 may well be his last chance to go from renter to homeowner in Manteca.
His sentiments reflect those of Manteca lenders and real estate agents who have been in business for a decade or more and are tracking foreclosures. All default tracking indications point to 2008 as well as the first six months of 2009 as being the peak of the foreclosures with a drop off starting in the second half of the year.
It mirrors RealtyTrac findings for 2007 and 2008 in Manteca, Ripon, Lathrop and Tracy where the first subprime loans were made as housing prices started climbing in late 2003 to levels that were unattainable for many buyers using conventional loans.
There were 399 homes lost to foreclosure within Manteca’s city limits in 2007. That jumped to 1,153 – or up 189 percent – in 2008. And unlike in 2007 when buyers many were paralyzed by uncertainty prompting the number of available listings to balloon to a record 651 available homes in September 2007, buyers started coming out in force in March of last year resulting in a record 1,165 existing homes being sold at a median price of $225,000 or $188,000 off the market’s peak in 2006. By comparison, there were just 402 existing home sales in Manteca during 2007.
The Multiple Listing Service this month reflects a change of course for Manteca. For most of 2008 the median price of pending sales was lower than the median selling price. The pending median price is $5,000 higher which may reflect segments of the market stabilizing and ending price free fall. That is especially true in the absolute bottom where more people can qualify to buy homes as they are the lowest prices.
As of last week, 34 homes had closed escrow in Manteca this year with a median selling price of $179,950. There are 195 pending sales with a median deal price of $184,900. There are another 389 homes available with a median listing price of $198,000.
There were more foreclosures in the 95337 Zip Code – 690 – than in the 95336 where 463 homes reverted back to the lenders. Even so, the two sub-areas in Manteca lost almost the same number of homes per 1,000 (65.8 in 95336 and 65.9 in 95337) as the northern Zip Code area has more homes overall.
A little less than 1 in 11 Manteca single family homes were lost to foreclosure between 2007 and 2008.  By comparison over 1 in 5 homes in Lathrop during the same time period were lost to foreclosures and 1 in 50 in Ripon.
Lathrop’s foreclosure rate in 2008 jumped 272.4 percent with 715 homes lost in 2008 compared to 192 in 2007.
Ripon’s foreclosure rate last year was up 122.2 percent over 2007 going from 54 homes to 120 homes.
Even with efforts to help people avoid foreclosure, less Manteca homeowners who received the notice of default — the first step in the foreclosure process — ended up keeping their homes and not losing them to the lender.
There were 606 notices of default in Manteca that didn’t end up as foreclosures. That compares to just 282 in 2008 that avoided going back to the bank.
Experts attribute that to a number of things including homes that received notices of default in 2007 may have gone into foreclosure in 2008 as well as sold as a short sale in 2008.
It wasn’t until early 2008 that most banks started slashing both the price of foreclosed homes they took back or else started making short sales work in a number of cases. Short sales occur when banks allow distressed borrowers to sell homes for less than they are owed. Very little of the 2007 notices of defaults were believed to have been worked out with new loans through lenders working with distressed borrowers. Experts say the majority of the 2008 homes that avoided foreclosure either had deals worked out with new loans or were short sales.
San Francisco Chronicle
Obama to order review of state's emissions bid...Zachary Coile, Robert Selna
President Obama, in his first major environmental act since taking office, will order the Environmental Protection Agency today to move swiftly on a request by California and other states to set the nation's toughest vehicle emissions standards.
Obama plans to make the announcement at a White House ceremony, according to congressional sources briefed on the plan. The move signals a sharp break with the Bush administration, which rejected California's request to enforce its rules limiting greenhouse gases from cars and trucks.
While Obama's order only requires the EPA to reconsider California's request, all sides expect the agency will approve it. His new EPA administrator, Lisa Jackson, must finish a formal review before making the decision, but environmentalists were already cheering the likely outcome.
"These are monumental decisions that will have an immediate impact in reducing global warming pollution in the United States," said Frances Beinecke, president of the Natural Resources Defense Council. "Just days into office, President Obama is showing America and the world that he will lead our country in a bold new direction to protect the environment and fight global warming."
Obama's presidential directive could ultimately transform the entire U.S. auto fleet. If the EPA approves California's request for a waiver to enforce its rules, any state can opt for either the federal or the state's emissions standards. Thirteen states have adopted California's rules, covering about half the nation's population, and a half-dozen more, including Florida, are considering doing so. Automakers probably would be forced to sell more fuel efficient cars and trucks in every showroom nationwide.
California Sen. Barbara Boxer, who chairs the Senate Environment and Public Works Committee and has lobbied Obama to approve the state's request, called his expected announcement "more than welcome news."
"An immediate EPA review of the waiver decision shows respect for California and the 18 other states ... who are waiting for the green light to address global warming pollution from motor vehicles," Boxer said. "When the waiver is signed, it will be a signal to Detroit that a huge market awaits them if they do the right thing and produce the cleanest, most efficient vehicles possible."
The auto industry opposes California's rules and has fought a long-running legal battle to block the standards. Automakers have warned of the perils of creating a patchwork of vehicle emissions rules and have lobbied Congress instead for a single national standard.
California's rules would require vehicles to reduce their greenhouse gases by 30 percent by 2016. The transportation sector is the single biggest source of greenhouse gas emissions in the state, at about 38 percent of total emissions.
The state's regulations are much more stringent than even the higher fuel economy standards passed by Congress and signed by Bush in 2007, which requires vehicles to reach an average fuel economy of 31.5 miles per gallon by 2015. The state's rules require automakers to meet a fleetwide average of 36 miles per gallon by 2016.
Obama's directive is also expected to force the Transportation Department to complete interim fuel economy standards to implement the 2007 law, which the Bush administration chose not to do. The goal is to speed the shift to more efficient vehicles, and the new rules would be issued by March so automakers would have time to update their fleet for the 2011 model year.
The East Room announcement is expected to be attended by Jackson, top EPA and Transportation Department officials and environmentalists, among others, Capitol Hill sources said.
Obama's decision is a victory for California leaders, including Gov. Arnold Schwarzenegger and California Air Resources Board Chairwoman Mary Nichols, who wrote letters last week urging the president to take action. Schwarzenegger's spokesman, Aaron McLear, said Sunday night that the governor was "withholding comment until the president has something to say."
California's landmark law limiting greenhouse gas emissions was written by former Assemblywoman Fran Pavley, D-Agoura Hills (Los Angeles County) and passed by the Legislature and signed by then-Gov. Gray Davis in 2002. It was supposed to go into effect starting in the 2009 model year. One thorny issue the EPA may decide is in which model year California's rules would now take effect to give automakers enough time to transition.
Senate President Pro Tem Darrell Steinberg, D-Sacramento, who was in the Assembly when the law was passed, said Obama's announcement "represents the beginning of a very different and much more positive relationship between California and the federal government."
"California did not get a whole lot of attention in the past eight years," Steinberg said. "This is an important signal that things will be different."
Derek Walker, director of the California Climate Initiative for the Environmental Defense Fund, said Obama's move also suggests that the new president rejected the automakers' assertions that California's rules would hurt the industry and the economy.
"This is a tremendous out-of-the-gate move by the new president and shows that he is taking a fresh look at environmental and energy policy from the perspective of sound science," Walker said. "It also shows that he understands the strong nexus between economic stimulus and environmental protection."
Obama targets greenhouse gases, fuel efficiency...BEN FELLER, Associated Press Writer
President Barack Obama took aim Monday at the lofty but long elusive goal of making the nation more energy independent, ordering reviews that could lead to tougher auto emission standards in states and higher pressure on automakers to produce more fuel-efficient cars.
Attacking a Bush administration policy, Obama directed the Environmental Protection Agency to re-examine whether California and other states should be allowed to have tougher auto emission standards to combat a build up of greenhouse gases.
Obama also directed his administration to get moving on new fuel-efficiency guidelines for the auto industry in time to cover 2011 model-year cars.
"For the sake of our security, our economy and our planet, we must have the courage and commitment to change," Obama said in his first formal event in the ornate East Room of the White House.
"It will be the policy of my administration," he said, "to reverse our dependence on foreign oil while building a new energy economy that will create millions of jobs."
California and at least a dozen other states have tried to come up with tougher emission standards than those imposed by the federal government, but Obama said that "Washington stood in their way." The president wants the EPA to take a second look at a decision denying California — and the other states that want to follow its model — permission to set tougher tailpipe emission standards.
More broadly, Obama sought to show he was not waiting to put his stamp on energy policy, which has both near-term implications on the sagging economy and long-range effects on pollution, climate change and national security.
"Year after year, decade after decade, we've chosen delay over decisive action," Obama said. "Rigid ideology has overruled sound science. Special interests have overshadowed common sense. Rhetoric has not led to the hard work needed to achieve results — and our leaders raise their voices each time there's a spike on gas prices, only to grow quiet when the price falls at the pump."
The Clean Air Act gives California special authority to regulate vehicle pollution because the state began regulating such pollution before the federal government got into the act. But a federal waiver is still required; if the waiver is granted, other states can choose to adopt California's standards or the federal ones.
In 2007 the Bush administration's Environmental Protection Agency denied California's waiver request, gaining praise from the auto industry but touching off a storm of investigations and lawsuits from Democrats and environmental groups who contended the denial was based on political instead of scientific reasons.
Obama on Monday directed the EPA to re-examine the decision. That does not yet overturn anything. But still, the states' wanting their own power considered it a victory.
"The federal government must work with, not against, states to reduce greenhouse gas emissions," Obama said. He added: "The days of Washington dragging its heels are over. My administration will not deny facts; we will be guided by them."
California's proposed restrictions would force automakers to cut greenhouse gas emissions by 30 percent in new cars and light trucks by 2016.
At least 13 other states — Arizona, Connecticut, Maine, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont and Washington — have already adopted California's standards, and they have been under consideration elsewhere, too.
Under California's approach, car makers would need to boost fuel efficiency in new vehicles to about 36.8 miles per gallon in the states that chose to adopt the California standards.
Automakers, which sued to block the state regulations, argued that it could require dealerships in some states to limit sales of large trucks in order to meet the standards. They have pushed for a single national standard.
Requiring automakers to build cars that get more miles to the gallon will reduce the amount of greenhouse gas emissions from the tailpipes of vehicles.
A law passed by Congress in 2007 requires that by 2020, new cars and trucks meet a standard of 35 miles per gallon, a 40 percent increase over the status quo. But the Bush administration did not set regulations in support of that law.
On Monday, Obama ordered new guidelines in place to start affecting cars sold in 2011.
He also promised a broader, bipartisan review with the auto industry.
Industry officials have also said they would face billions of dollars in new costs to meet the rules at a time when General Motors Corp. and Chrysler LLC have received billions in federal loans to stay afloat.
The Bush administration estimated the federal fuel economy rules would cost the industry more than $100 billion to implement the changes by 2020.
"Let me be clear: Our goal is not to further burden an already struggling industry," Obama said. "It is to help America's automakers prepare for the future."
Meanwhile, Secretary of State Hillary Rodham Clinton on Monday will appoint a special envoy for climate change as the Obama administration moves to restore America's credentials in environmental policy, said U.S. officials familiar with her decision.
Economic stimulus or just more pork?...Zachary Coile, Chronicle Washington Bureau
Is $200 million to rehabilitate the National Mall a crucial way to stimulate the U.S. economy? How about $276 million to fix the computer systems at the State Department? And what about $650 million to repair dilapidated Forest Service facilities?
As Congress rushes toward what leaders of both parties predict will be a speedy passage of an $825 billion economic stimulus package, critics from GOP lawmakers to government watchdog groups are questioning whether key parts of the bill will spur economic growth or whether they're wasteful pork.
House Republican Conference Chairman Mike Pence of Indiana pointed to a $50 million outlay for the National Endowment for the Arts - an agency that conservatives have long criticized - to help arts groups hit by a drop-off in philanthropy.
"This is stimulus?" Pence asked.
President Obama, responding to the concerns, is making an aggressive sales pitch for the package. In his first presidential radio address Saturday, he said it would accomplish big things: renovate 10,000 public schools, build 3,000 miles of new electric grid, computerize all Americans' health records in five years, weatherize 2.5 million homes, provide Pell Grants to 7 million college students, and protect the health insurance of 8 million Americans who risk losing coverage during the downturn.
Top administration officials also warn that without the plan, the unemployment rate could hit double digits and the economy could sink deeper into recession.
"It is worse, quite frankly, than everyone thought it was, and it is getting worse every day," Vice President Joe Biden said on CBS' "Face the Nation" Sunday.
All sides agree the plan carries a hefty price tag: It will be paid for with borrowed funds and could swell an already mammoth $1.2 trillion deficit forecast for this year to more than $2 trillion.
Obama had hoped to pick up bipartisan support for the plan, but Republicans have grown increasingly critical of the size of the package. GOP leaders also argue that some of the provisions seem more aimed at achieving liberal policy goals rather than reviving the economy.
House Minority Leader John Boehner, R-Ohio, criticized a part of the bill's $87 billion package to help states with Medicaid costs that would allow states to expand their family planning services. Leaving a White House meeting with Obama on Friday, Boehner said, "How can you spend hundreds of millions of dollars on contraceptives? How does that stimulate the economy?"
House Speaker Nancy Pelosi, appearing on ABC's "This Week" on Sunday, defended the spending. "The family-planning services reduce cost," she said. "The states are in terrible fiscal budget crisis now, and part of it, what we do for children's health, education, and some of those elements, are to help the states meet their financial needs."
When Obama announced this month that there would be no earmarks in the bill, it sharply curtailed the ability of lawmakers to steer money for pet projects in their districts. But critics say the move won't remove politics from the process - it simply shifts the power to bureaucrats at state and federal agencies, who will distribute billions for roads, schools and other projects.
"In the past, in the appropriations bills we could see a list of the projects. They were right there printed in the bill," said David Williams, vice president for policy at Citizens Against Government Waste, a watchdog group. "Now it's going to be a lot more difficult to see where the money is spent. You will have to contact each agency and each program manager to find out where the money is going."
Recovery Web site
Obama and Democratic leaders are hoping to allay those concerns by creating a Web site - www.recovery.gov - where the public can track how the money is being spent.
Some of the biggest winners in the package are federal agencies, which would see a huge infusion of money. The Social Security Administration would get $400 million to replace its 30-year old computer system. The Agricultural Research Service would receive $209 million for deferred maintenance at its facilities. The General Services Administration would get $600 million to replace its older fleet of vehicles with new alternative-fuel cars and trucks.
Democrats say their goal is to create jobs by speeding up work on federal and state projects that would otherwise have waited years for funding.
"The whole idea here is there are lots of projects that have been in the pipeline, on the planning boards, and we're saying, let's get it now," Rep. Chris Van Hollen, D-Md., said last week.
The Democratic plan took a hit when the Congressional Budget Office estimated that only 7 percent of infrastructure money would make its way into the economy by the end of the year, and only 38 percent would be spent by the end of the 2010 fiscal year. Obama's new White House budget director, Peter Orszag, disputed the findings, saying 75 percent of the money would be spent by fiscal 2010.
Saving millions of jobs
Other parts of the package, including the tax cuts and the direct aid to states, would be injected more quickly into the economy. The bill would offer a payroll tax cut of $500 to individuals who earn less than $75,000 a year, and a $1,000 credit to married couples who earn less than $150,000 a year.
Democrats defended their proposal by citing an analysis by economist Mark Zandi of Moody's, who concluded that the plan would create or save 4 million jobs and keep the unemployment rate 2 percentage points lower than it would be without the package.
The House, with its sizable Democratic majority, is expected to easily pass the bill on Wednesday. In the Senate, Democrats are confident they can pick up the one or two Republican votes needed to reach a 60-vote majority.
But Sen. John McCain, R-Ariz., the GOP presidential nominee last year who has pledged to work with Obama, said Sunday he won't be among the Republicans supporting the package.
"As it stands now, I would not" vote for the bill, McCain told Fox News on Sunday, explaining that he'd like to see more tax cuts and GOP input into the bill.
Useful or wasteful?
Supporters say key provisions of the $825 billion economic stimulus bill will help create jobs and revive the U.S. economy, but critics see some of the spending as wasteful. Here's a sampling of how some of the money would be used:
$44 million for repairs at the Agriculture Department headquarters in Washington.
$200 million to rehabilitate the National Mall.
$360 million for new child care centers at military bases.
$1.8 billion to repair National Park Service facilities.
$276 million to update technology at the State Department.
$500 million for the Transportation Security Administration to install bomb detectors at airports.
$600 million for General Services Administration to replace older vehicles with alternative fuel vehicles.
$2.5 billion to upgrade low-income housing.
$400 million for NASA scientists to conduct climate change research.
$426 million to construct facilities at the Centers for Disease Control and Prevention.
$800 million to clean up Superfund sites.
$150 million for the Coast Guard to repair or remove bridges deemed a hazard to navigation.
$6.7 billion to renovate and improve energy efficiency at federal buildings.
$400 million to replace the Social Security Administration's 30-year-old National Computer Center.
Source: Chronicle staff report
Rio Vista - hard times in a small town...Carolyn Jones, Chronicle Staff Writer
If despair has an address, it's the corner of Park Place and Hearth Lane, Rio Vista.
The ambitiously named intersection is marked by an ornate colonial streetlamp, a freshly paved street and pristine sidewalks.
And nothing else. No homes, no people, no cars. Just a flat, windswept plain on the eastern edge of Solano County with a few utility wires jutting through the dirt. In the distance are cows, some eucalyptus and 13 unfinished, abandoned model homes.
Park Place and Hearth Lane was supposed to be the center of an upscale 855-home development called Hearth and Home at Liberty. But last year, as the housing market imploded, the developer, Shea Homes, abandoned the project, leaving a moonscape and a constant reminder of Rio Vista's - and the state's - economic meltdown.
"Everyone's afraid. We're all just barely hanging on," said Allison Shawnego, who works at Hap's Bait shop along the Sacramento River. "Everyone's just going through the motions, focusing on their kids, school, whatever. This is a nice little town, but there's no jobs."
Rio Vista, a city of about 7,000, has weathered 150 years of California economic cycles - from the bust of the wheat crop to the end of Sacramento River shipping industry to the Great Depression of the 1930s. But the collapse of the housing market threatens to drag the town - and dozens like it - into financial chaos.
"Cities everywhere are struggling right now with revenues that are way short of what they've budgeted," said Megan Taylor, spokeswoman for the League of California Cities. "But they've been bracing for it. In many cases, cities are making really severe cuts to get by."
Verge of bankruptcy
Rio Vista and its neighbor, Isleton, have been teetering on the brink of bankruptcy, while across the county Vallejo filed for bankruptcy in May, becoming only the second California city to go that route.
In Rio Vista, the problems stem from plummeting property and sales taxes and building fees due to the housing bust, and a drop in funds from the state. Earlier this year, Rio Vista was grappling with a $900,000 deficit in its $6.6 million general fund.
The city has laid off four employees, frozen salaries and left open about 20 vacant full-time positions, reducing the staff from 61 to 40 employees. The city has also cut recreation programs and closed City Hall one day a week.
The deficit is now about $160,000, and City Manager Hector De La Rosa said he's confident the city can survive through the end of the fiscal year in June without filing for bankruptcy.
"We're hopeful, but we are not out of the woods," he said. "If we make any more cuts, things will really start falling through the cracks."
Expecting further declines in revenues over the next two years, the city will likely consider work furloughs for staff, selling city-owned properties, raising business fees, increasing the sales tax and returning to the front that created many of its problems to begin with: more housing.
The city has given preliminary approval for two more housing developments, a 750-home Seeno development called Riverwalk and a 2,200-unit neighborhood called Del Rio Hills.
"Whether these will ever be built is yet to be seen," De La Rosa said. "But any development, at this point, would be a shot in the arm for this community."
Rio Vista came relatively late to the housing bonanza. In the past few years, the city has ushered in just three developments: Homecoming, 250 modestly sized homes; Trilogy, an active-adult development that so far contains about 2,000 units but will include 3,100 units when completed; and the Liberty project.
Shea embarked on Liberty at the peak of the housing market, in 2005, when it bought a former ranch northwest of the Rio Vista airport with the intention of building colonial style homes ranging from 1,800 to 3,800 square feet.
Shea graded the land, installed utilities and built sidewalks and streets.
In 2007, building stopped.
"We started construction when the market was still strong, and got caught when the market turned," said Matt Henry, Shea's vice president of land acquisition. "The market got worse and worse, so we've put the project on hold. These are severe economic conditions and, like everyone else, we're just waiting for things to improve."
The city, meanwhile, has police patrol the area, ensuring that the model homes are not vandalized, even though it has not seen the property tax and building fee income it was expecting from the project.
Costly effects
But the stalled development has had a ripple effect, leaving local contractors out of work and pounding a real estate market that's already in its death throes.
Evidence of Rio Vista's struggles is everywhere. Storefronts along Main Street stand boarded up, and landlords are advertising "six months free rent" downtown. In 2005, the median home price hovered in the $400,000 range, but today the median home price is $224,000, according to DataQuik. Between 2007 and 2008, the typical home price has dropped about $90,000, says real estate agent Chris Boothe, who works at Richards Real Estate on Main Street. "I bought my house in 2005, and it's worth less than half what I paid," said Boothe. "We all knew this was coming, but I think we've all been in denial."
Nearly every home for sale in Rio Vista is a foreclosure or short sale. Families who've lost their homes are moving in with relatives, or relocating to apartments in Stockton, Antioch or other nearby cities where prices have fallen even lower than in Rio Vista.
Boothe spends much of her time helping families through the agonizing process of giving up their homes.
"I see a lot of anger, depression," she said. "At first, I found it really overwhelming. But what else am I going to do? You just get through it."
As in many small towns, Rio Vista residents have found creative ways to pull through. Seniors from Trilogy have increased their volunteer hours at local schools and charities, downtown merchants - such as the florist and wine shop - are sharing quarters, and community groups have started offering youth baseball and softball to make up for the city's cuts to recreation programs.
Although everyone agrees the next year or two are likely to be even more grim than 2008, most Rio Vistans are optimistic. Some businesses, such as Foster's Bighorn bar and restaurant, noteworthy for its 300 wild animal heads mounted on the wall, have seen revenues actually increase 10 percent in the past year.
"I think things are very positive," said Foster's owner, Howard LaMothe, a fourth generation Rio Vistan. "The City Council is really taking the bull by the horns, and they know bankruptcy is not an option. It's been tough for some people, but there's a lot of hope."
Brad Brodston, who lost his job at an auto repair shop last year, is also optimistic. He spends his days fishing for bass and flounder in the delta, waiting until the economy picks up and he can find work again.
"It was real hard for six months after I lost my job. I relied a lot on family and friends," said Brodston, who has lived in Rio Vista most of his life. "But I have serious friends here. I'd never leave. It's a wonderful place to live. It's going broke, but it's a great town."
Rick Armstrong: Construction is slow, so bridge builder plans to open a market
Rick Armstrong looks at 1,000 feet of empty shelves and sees hope for the future.
"I built bridges for 30 years. I didn't think running a store could be much harder," said Armstrong, 60, an easy-going engineering contractor who hopes to open Rio Vista Market within the next few weeks. "There's hardly any work out there in construction. I'm too young and too poor to retire, so I thought I'd try something different."
Armstrong spent most of his career building local housing and infrastructure. But as the credit and mortgage crisis hit, construction jobs halted overnight and jobs evaporated. Bids on local projects dropped so low he could not afford to compete, and he knew he had to find another line of work to pay his bills.
"Everyone I know in construction is out of work right now," he said. "When things are bad in a big city, they're four times worse in a small town because there's nothing to fall back on. When housing goes, it affects so many of us - builders, guys at the hardware store, banks, people in real estate. It's been really tough for a lot of people."
So Armstrong decided to pour his savings into opening a grocery store. Rio Vista has one other market, a few blocks away, but none on Main Street. In May he leased a former karate studio, installed shelves and coolers and hopes to stock the 3,000-square-foot space with fresh produce and meat, dog food, canned soup, paper towels and other staples.
"If I can sell my products, help people out and make a comfortable living, then I'll be happy," he said. "If it goes well, then who knows, I may build a couple more stores."
Julie Oakes: Florist is now sharing space with a wine shop to save on expenses
Wedding budgets are down. The number and size of funerals have dropped off. Even anniversary bouquets are shrinking. But Julie Oakes is determined to stay in the flower business.
"It's six days a week, work, work, work, but I am hanging on," said Oakes, who opened Rio Vista Floral Designs five years ago, after she left her job as home editor of the Contra Costa Times amid layoffs and cutbacks.
"I don't know what else I would do or what I would be," she said. "I am a small town florist - it's who I am. I want to die here."
Oakes' quaint, fragrant shop on Main Street has so far weathered the economic downturn, although just barely. Christmas business was brisk, and she's hoping for a busy Valentine's Day. She believes the economy will recuperate - eventually.
Meanwhile, she's merged her store with the wine shop across the street to save on rent and utilities.
"I'm getting the sales, but a lot of people just can't pay," she said. "A lot of people are out of work. We're all just trying to outrun the bill collectors."
Oakes, 47, moved to Rio Vista from Vacaville when she bought the business in 2003. She fell in love with Rio Vista and is resolute that her flower shop will outlive the recession.
"Everyone's optimistic," she said. "I don't think it'll be fatal, but it's going to hurt for a while. Besides, there's no jobs out there, so what else would I do?"
Mercury News
Moffett Field marshland to be cleaned of contaminants...Diana Samuels, Bay Area News Group
The Navy plans to clean up some of the contaminated marshland at Moffett Field as well as remove the toxic siding at Hangar One, signaling a victory for environmental groups.
The Navy's proposed plan to decontaminate and restore the marshland is currently in a public comment period, and about 20 citizens attended a public meeting Thursday to ask questions.
The plan concerns Site 25, a 230-acre area in the northwest corner of Moffett Field that's home to marshland and a storm water retention pond. The pond is a blocked-off section of the Bay designed to hold storm water runoff from Moffett Field. Sediment and water samples from there have lead, zinc and the pesticide DDT, as well as the PCB contaminant that's caused controversy for Hangar One.
"Storm water for years was allowed to run off other parts of the base and accumulate," said David Lewis, executive director of Save the Bay.
The samples showed high levels of contaminants that would have threatened animals such as the salt marsh harvest mouse and the Alameda song sparrow, preventing the area from being restored to a tidal marsh.
Under the Navy's plan, contaminated sediment would be excavated and taken to an off-site landfill. Some sediment that contains lead and zinc would be treated on-site to stabilize the contaminants, then excavated. By being stabilized beforehand, the sediment can be removed as a non-hazardous waste, which is cheaper to dispose than hazardous waste.
The Navy intends to keep excavating and replacing sediment until contaminant levels are low enough to support restoration as a tidal marsh. The project would cost $7.8 million and take six months.
"This is really important progress," Lewis said. "We're excited to see them taking steps to do the cleanup after first refusing and several years of delay."
The Navy had proposed a different plan to clean the base in 2001, but environmental groups said it didn't go far enough to let the site become tidal marshland again. The Midpeninsula Regional Open Space District owns a portion of Site 25, and had joined environmental groups in pushing the Navy to adopt a plan aimed at restoration.
"There's a history all around the nation of the military leaving facilities without cleaning them up," Lewis said.
The Bay has lost 90 percent of its wetland to development and other causes over the past century, Lewis said.
"Any place where we can restore tidal marsh, we should be trying to do that," he said.
The excavation will have to wait until Hangar One is cleaned up, said John Hill, base closure manager for Moffett Field. That's because contaminants from the hangar would continue to flow into the storm water runoff. Work on the hangar could begin by the end of the year.
The public comment period for Site 25 runs until Feb. 9, at which point the Navy will develop more specific plans. Thursday's meeting was "pretty non-controversial," said Melanie Ault, who works with the Navy's base realignment and closure program.
"We've been through this for such a long time that there was not a lot of controversy," said Peter Strauss, who represented the Center for Public Environmental Oversight at the meeting. Strauss said he would like to see the Navy lay out more specific guidelines for monitoring contaminant levels in the future.
"We have to move on to figuring out how tidal restoration will be implemented," said Lenny Siegel, director of the Center for Public Environmental Oversight, "but this is a good thing, no doubt about it."
The Navy intends to keep excavating and replacing sediment until contaminant levels are low enough to support restoration as a tidal marsh. The project would cost $7.8 million and take six months.
Los Angeles Times
Real estate reality
Government and the financial sector must do more to stem the rising tide of foreclosures...Editorial
As lawmakers look for a way out of the recession, it's worth remembering how we got into this mess in the first place. The collapse of the housing market sucked trillions of dollars worth of real estate wealth out of the economy, starting a vicious cycle of cutbacks by consumers, lenders and businesses. But the collapse wasn't a one-time event. It's an ongoing process that could take a larger human and economic toll this year than it did in 2008, when the number of troubled homeowners nearly doubled from the year before. According to RealtyTrac, lenders made foreclosure filings on 2.3 million properties last year (more than half a million in California alone), including nearly 2% of all housing units. New laws here and in several other states reduced the pace of foreclosure filings, but they haven't helped homeowners pay their bills. As a consequence, the FDIC projects another near-doubling of housing misery, with 4.4 million mortgages falling 60 to 90 days past due by the end of 2009.
It's no coincidence that more banks are sliding toward insolvency as defaults mount. The financial industry placed a huge bet on Americans paying their mortgages, along with an intricate web of side bets on the U.S. housing market. Keeping more homeowners out of foreclosure could help end the sickening slide in home values, solidifying the ground under the financial industry and coaxing more buyers back into the housing market. It's not as simple as that, of course; rising unemployment has become a major factor in the market, driving more homeowners into default with no hope of recovery. Still, if lenders don't do more for those whose homes could be saved, the situation will only get worse.
Some argue that government should let the market take its course. More banks are modifying loans for buyers who can afford somewhat reduced monthly payments, and repossessing homes from buyers who shouldn't have received loans at all. Foreclosure, they say, is a fitting resolution for such people and the lenders that encouraged them. We agree that rescuing people and businesses from their own risk-taking poses a significant moral hazard. That's why we believe that policymakers shouldn't try to shield borrowers or banks from drastically lower property values and lost returns. But government can and should help them adapt to the collapsing market. Given the links between the wave of foreclosures and the overall health of the economy, everyone fares better when lenders and homeowners can strike deals that cost less and preserve more of a home's value than a foreclosure sale would.
Finding the right way to help borrowers, however, is a tricky business. Congress' biggest initiative, the Hope for Homeowners program, was supposed to refinance 400,000 defaulting loans into government-guaranteed mortgages over three years. In its first three months, it received only 412 applications and provided a grand total of 17 loans. The near-complete disinterest in the program stems from the restrictions and fees that Congress imposed to limit the cost to taxpayers -- a penny-wise, pound-foolish strategy. Meanwhile, lenders' early efforts to help borrowers fared poorly, with a high percentage defaulting again on their mortgages. But more recent efforts, such as the FDIC's handling of defaulting IndyMac Bank loans and Fannie Mae's modification of loans bought from investors, show that 60% or more of the borrowers in trouble can be rescued with the right set of terms.
Those successes and failures help draw the outlines of the right response to the foreclosure problem. Lenders need to follow the lead of the FDIC, Bank of America and JPMorgan Chase in setting affordability formulas that enable them to reevaluate borrowers and modify mortgages on a mass scale. As shown in a recent study by Alan M. White, a Valparaiso University law professor, the first round of modifications frequently failed because they didn't reduce monthly payments and often provided only temporary help. The changes need to yield mortgages that buyers can afford over the long term, giving them more reason to keep paying.
The government can help on this front by providing financial incentives for loan servicing companies and reducing barriers to modifications. In particular, servicers should have more freedom to modify the loans owned by investor groups, which held 61% of the long-overdue mortgages at the end of December. Any modification should be fair game if it would yield more for investors than a foreclosure sale. (That's a fairly low bar; by White's estimate, the average foreclosure in November resulted in a 55% loss for the lender.) A trade group for mortgage- security investors agreed in 2007 to provide such flexibility for subprime loans, but the mortgage crisis has already advanced deep into other borrowing categories. Congress could also encourage modifications by letting bankruptcy judges rework home mortgages, rather than forcing bankrupt homeowners to sell.
One other factor that needs to be addressed is a borrower's incentive to abandon a home when the value falls below the amount owed. The problem is exacerbated by the popularity of loans that required little or no down payment, which generated a class of buyers with no equity stake in their homes. Some economists have suggested that taxpayers should cover the gap between a homeowner's debt and the current value of the house, but we're not comfortable with that idea at this point because it would rescue lenders from their careless practices. We'd rather see Congress fix the Hope for Homeowners program, which encouraged lenders to write down enough debt to restore a borrower's stake in the home.
Even with an aggressive effort to avert foreclosures, millions of people are likely to lose their homes because they just can't afford them in this recession. That's all the more reason to try harder to help the ones who can be helped.
Disappearing now: $6 trillion in housing wealth...Peter Viles, L.A. Land 
A Washington think tank is warning that housing prices are falling at an accelerating level, destroying wealth at a pace that will cost the average homeowner $85,000 in lost wealth this year alone.
The projections by the Center for Economic and Policy Research are based on the numbers in Tuesday's Case-Shiller home price index, which showed accelerating price declines in most big cities.
The annual rate of price decline over the last quarter was 24.9% in the 20-city index and 25.8% in the 10-city index," the center said in its Housing Market Monitor today. "At this rate of price decline, the excesses of the housing bubble will have largely disappeared by the end of the year. At the same time, the price decline implies an incredibly rapid loss of wealth. In real terms, the rate of price decline in the 20-city index would imply a loss of almost $6 trillion in real housing wealth over the course of the year, an average of $85,000 per homeowner."
I'm a so-so student of economic history, but I'd have to bet that, even adjusted for inflation, the only time that many Americans have lost that much wealth in a short period of time would have been during the Great Depression. I'm not even sure it happened during the Depression. (I understand: This hasn't happened yet; it's only a prediction.)
Repeating again: The CEPR says prices are falling so rapidly that the bubble will be gone by the end of 2008, but the loss of housing wealth will be massive.
Washington Post
Obama Announces New Energy, Environmental Policies...William Branigin, Juliet Eilperin and Steven Mufson
President Obama today promised new U.S. leadership in the fight against global warming as he announced a series of steps aimed at making American cars more fuel efficient and reducing greenhouse gases, including a directive to the Environmental Protection Agency to reconsider granting California and other states waivers to set their own strict regulations on auto emissions.
In remarks at the White House at the start of his second week in office, Obama declared a national goal of ending dependence on foreign oil and called on Congress to pass a massive stimulus package that he said would help "create a new American energy economy."
Flanked by Transportation Secretary Ray LaHood and EPA Administrator Lisa P. Jackson, he signed two presidential directives that could lead to the production of more fuel-efficient American cars with reduced tailpipe emissions.
The moves are aimed at reversing decisions by Bush administration, which he said had stood in the way of bold action by California and other states to limit greenhouse gas emissions from automobiles.
"The days of Washington dragging its heels are over," Obama said.
He said he could not promise a "quick fix" for the nation's dependence on foreign oil, but he pledged to "commit ourselves to the steady, focused, pragmatic pursuit" of energy independence.
Saying the nation has arrived at a "crossroads," he declared: "It will be the policy of my administration to reverse our dependence on foreign oil while building a new energy economy that will create millions of jobs."
Obama said the administration would ensure that the fuel-efficient cars of the future are built in the United States and would start by implementing new fuel efficiency standards for the 2011 model year.
"Our goal is not to further burden an already struggling industry," he said, but to help American automakers "prepare for the future" and "thrive by building the cars of tomorrow."
Separately, the State Department is expected to name Todd Stern, formerly a senior official in the Clinton administration, as the new U.S. envoy on climate change, news agencies reported. Stern, a partner in a Washington law firm and a senior fellow at the Center for American Progress think tank, coordinated the Clinton administration's Initiative on Global Climate Change from 1997 to 1999 and served as the top White House negotiator on the Kyoto talks on global warming from 1999 to 2001.
In the presidential directives he signed today, Obama instructed the Environmental Protection Agency to reconsider whether to grant California and other states waivers to regulate automobile tailpipe emissions linked to global warming, and he ordered the Transportation Department to issue guidelines to ensure that the nation's auto fleet reaches an average fuel efficiency of 35 miles per gallon by 2020, if not earlier. Under a 2007 law, the annual fuel economy increases begin with the 2011 model year, Obama noted. To meet the standards for 2011, he directed that a federal rule be published by March 30.
On Dec. 19, 2007, then-EPA Administrator Stephen L. Johnson blocked the efforts of California and more than a dozen other states to limit automobiles' carbon dioxide emissions, arguing that President George W. Bush had addressed the issue by signing a law that same day raising the corporate average fuel-efficiency standard to 35 miles per gallon by 2020. But California's tailpipe emissions rules would have effectively required even greater fuel-efficiency increases by seeking to cut vehicles' greenhouse gas emissions by 30 percent between 2009 and 2016, something American automakers have resisted.
The Bush administration never issued near-term guidelines for tighter fuel-efficiency standards. The Transportation Department circulated a proposal last fall that would have required auto companies to build new cars averaging as much as 31.8 miles per gallon by 2015, compared with the current level of 27.5 miles per gallon, but it announced less than two weeks before Bush left office that it would not issue formal guidelines.
Obama today called U.S. dependence on oil "one of the most serious threats" facing the nation.
"It bankrolls dictators, pays for nuclear proliferation and funds both sides of our struggle against terrorism," he said in the East Room of the White House. "It puts the American people at the mercy of shifting gas prices, stifles innovation and sets back our ability to compete. These urgent dangers to our national and economic security are compounded by the long-term threat of climate change, which, if left unchecked, could result in violent conflict, terrible storms, shrinking coastlines and irreversible catastrophe."
Yet, for years "we've chosen delay over decisive action," Obama said. "Rigid ideology has overruled sound science. Special interests have overshadowed common sense."
Although states such as California have shown "bold and bipartisan leadership" on reducing greenhouse gas emissions, Obama said, "Washington stood in their way," risking the creation of "a confusing and patchwork set of standards that hurts the environment and the auto industry."
California Gov. Arnold Schwarzenegger (R) hailed Obama's decision on auto emissions.
"Allowing California and other states to aggressively reduce their own harmful vehicle tailpipe emissions would be a historic win for clean air and for millions of Americans who want more fuel-efficient, environmentally-friendly cars," Schwarzenegger said in a statement.
On the international front, Obama vowed that "we will make it clear to the world that America is ready to lead," and he called for "a truly global coalition" to protect the climate.
"That's how we will deny leverage to dictators and dollars to terrorists, and that's how we will ensure that nations like China and India are doing their part, just as we are now willing to do ours," he said. "It is time for America to lead because this moment of peril must be turned into one of progress."
He added, "We have made our choice: America will not be held hostage to dwindling resources, hostile regimes and a warming planet."
Daniel J. Weiss, who directs climate strategy at the Center for American Progress, a liberal think tank, praised the new administration for pressing ahead with ambitious fuel economy goals.
"President Obama has done more in one week to reduce oil dependence and fight global warming than President Bush did in eight years," he said in a statement. "His actions today respond to scientists' urgent warnings to reduce global warming pollution now before it's too late. These fuel economy measures come on top of $90 billion of clean energy investments in his economic recovery package. This is a complete reversal of President Bush's policy of censoring or ignoring global warming science."
But congressional Republicans voiced misgivings, saying they were worried about the impact on struggling automakers.
"I am fearful that today's action will begin the process of setting the American auto industry back even further," Sen. George V. Voinovich (R-Ohio) said in a statement. "The federal government should not be piling on an industry already hurting in a time like this."
A spokeswoman for House Minority Leader John A. Boehner (R-Ohio) called Obama's announcement poorly timed and ill-conceived, the Associated Press reported. "Our nation's automakers are struggling -- drastically restructuring and shedding jobs just to stay afloat," Antonia Ferrier said. "And now they are being forced to spend billions of dollars to comply with California's emissions standards, instead of using that money to save American jobs."
Granting a waiver for California to regulate tailpipe emissions would affect nearly half the U.S. auto market. Thirteen other states -- including Maryland -- and the District have already adopted California's proposal, while at least four others have pledged to do so. When the EPA rejected the waiver, Obama issued a statement saying the decision "is yet another example of how this Administration has put corporate interests ahead of the public interest. If the courts do not overturn this decision, I will after I am elected president."
"Not only is the new president a man of his word, but he's making a dramatic break with the Bush administration's climate policy," said Frank O'Donnell, who heads the advocacy group Clean Air Watch. "It's a powerful signal that science -- and the law -- will guide his administration's decisions. This should prompt cheers from California to Maine."

The Charleston Gazette
Coal trying for slice of stimulus package...Ken Ward Jr...1-25-09
Coal company officials and their supporters in Congress are working to increase the industry's already large chunk of the economic stimulus package.
Lawmakers in the House set aside $2.4 billion in their current version of the legislation for research into capturing greenhouse gas emissions from coal-fired power plants.
Democratic leaders in the House Committee on Commerce and Energy defeated Republican efforts to also make coal eligible for a loan guarantee program for renewable energy projects.
In the Senate, Jay Rockefeller, D-W.Va., was lobbying fellow lawmakers and President Obama behind the scenes to try to get more money for what supporters call "clean coal" programs.
"He wants it as big as possible," said Jamie Smith, Rockefeller's communications director. "He's going to just keep working for more and more and more money for this."
On Friday, lawmakers and Senate staff members were negotiating their version of a stimulus package, a measure intended to help boost the sagging economy across the country.
If Rockefeller succeeds, it won't be the first time that he helped guide money intended for economic recovery efforts to the coal industry.
Last year, when it passed the massive Wall Street bailout, Congress threw in a $2.8 billion package for the coal industry.
Most of that money was aimed at encouraging power producers to limit greenhouse gas emissions. However, the bill also aimed to promote turning coal into liquid fuel, a move that could double greenhouse gas emissions from vehicle fuels.
During a confirmation hearing last week, Rockefeller lectured Treasury secretary nominee Timothy Geithner about "clean coal," and worried that not everyone working in the Obama administration is friendly to the industry.
Rockefeller said that Larry Summers, one of Obama's top economic advisers, favors more research on how to burn coal more cleanly, but, Rockefeller said, "don't try it on Carol Browner," who is Obama's White House expert on energy and climate issues.
"So we have this situation where you cannot run a country unless you find a substitute for what is now currently not clean coal," Rockefeller said, "and my question to you, sir, is why is it that we are not talking about putting this in the package?
"Spending the money to answer what to me is overwhelmingly the largest - solve all the bank problems you want, executives paid fairly, regulate properly - won't make any difference if you don't have electricity," he said.
Obama has touted efforts to shore up the economy as an opportunity to also push changes in the nation's energy systems to be greener and more climate-friendly.
Just days before his inauguration, Obama stopped in Bedford Heights, Ohio, to visit the Cardinal Fastener Factory there. Obama noted that the company's bolts were used in the Statue of Liberty and the Golden Gate Bridge, but that the firm now earns half of its money from making parts for wind turbines.
"In some ways, you can't think of a more iconic company than Cardinal Fastener," Obama said. "The story of this company ... is that renewable energy isn't something pie in the sky. It's not far off in the future. It's happening all across America right now."
During his inaugural address, Obama said, "Each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet.
"We will harness the sun and the winds and the soil to fuel our cars and run our factories," Obama said.
During his campaign, Obama promised to invest $150 billion over 10 years on a variety of energy programs, and to launch public/private partnerships to build five commercial-scale coal-fired plants that capture carbon dioxide emissions.
However, environmental groups are concerned that Congress will not put tight enough restrictions on "clean coal" projects - requirements that they say actually limit their greenhouse emissions and do so now rather than much later. Also, some citizen groups, especially those who oppose mountaintop removal in Appalachia, argue there is no such thing as "clean coal," whether greenhouse emissions are captured or not. 

CNN Money
Obama and emissions: Right vs. smart
The President will control the future of the auto industry when he rules on emission and fuel economy standards...Alex Taylor III, senior editor
NEW YORK (Fortune) -- Government-guaranteed loans for General Motors and Chrysler are getting most of the attention in Washington right now, but President Obama has an opportunity to do something far more important for the future of the auto industry on Monday.
The question is whether he will do the right thing - or the smart thing?
The president directed government regulators Monday to move quickly on a request by California and 13 other states to set their own standards for automobile emissions and fuel efficiency.
California's proposed standards are far stricter than those that the federal government has set. The Environmental Protection Agency wants automaker fleets to average 35 miles per gallon by 2020. The California standards would effectively require them to provide cars that average 42 or 43 miles per gallon.
Obama's action would push the EPA to rule on whether California and the other states can set their own standards. When the Bush administration ruled on the same issue, it refused to grant them a waiver.
Naturally, the reflexive good government position on this issue is to allow California to go ahead. Force the auto companies to toe the mark and make more economical cars, the argument goes, and the country will be better off. Cars that use less gas and pollute less are good for everybody.
Unfortunately, that argument ignores some inconvenient truths. Meeting one strict fuel economy standard - the federal government's - is burdensome in its own right. It requires new smaller platforms, new high-technology engines, and, inevitably, higher prices for consumers. Forcing automakers to design a second fleet of cars for California could greatly inflate the cost.
Secondly, adjusting automaker fleets to meet stricter standards in all those states will force a whole new kind of higher mathematics. Want to buy a Toyota pickup truck in New York, one of the states that wants to follow California's emissions standards? Well, if Toyota already sells a lot of trucks in New York and is close to or over the mileage limit, it may not be willing to sell you another gas guzzler that would push it over the state requirement.
Automakers will essentially adjust the fleet of vehicles they sell on a state-by-state basis. You may want to drive across the state line to Connecticut or New Jersey to get your pickup. If residents of those states don't buy very many trucks, you'll be in luck.
Finally, while higher fuel economy standards may feel like an "eat your spinach" effort by government to force us to use less oil, they ignore a reality of the marketplace. Small cars may be good for us, but if nobody wants to buy them, they won't do anybody any good.
There is an idea afoot in the land that automakers are holding back on small cars because they would rather sell high-margin pickups and SUVs.
It isn't true. They hold back on small cars because nobody wants to buy them. And since they are hard to sell, automakers can't make any money on them. If there was steady, predictable demand, you would see waves of good, small cars.
The history of auto sales in 2008 provides a case in point. When gas prices spiked, sales of small and hybrid cars shot through the roof. After prices came back down, dealers couldn't give them away.
The smart thing for President Obama to do to encourage lower gas consumption is to make gasoline more expensive by hiking the federal tax. Applying a $2 gallon tax in gradual stages would move people out of big cars in a hurry, just as high gas prices did last spring. To keep the higher tax from being a burden, it could be rebated to wage earners in the form of a reduction in their payroll taxes.
What's smart often times doesn't look right, but that doesn't mean it should be ignored. President Obama has promised a new way of doing business. Denying the California waiver and imposing a higher gasoline tax would be a loud, clear message that he means it.
Existing home sales in surprise jump
Sales of existing homes in December rose 6.5% from November. But prices continued to fall, down over 15% from last year...Catherine Clifford
NEW YORK (CNNMoney.com) -- The number of existing homes sold in December rose 6.5% from the previous month, according to a report released Monday, as bargain hunters took advantage of plummeting prices.
The National Association of Realtors said that home sales increased to a seasonally-adjusted, annualized rate of 4.74 million units. That's up from a revised pace of 4.45 million units sold in November and more than the rate of 4.4 million units projected by a consensus of industry analysts as reported by Briefing.com.
"We have some months to go before we are out of the woods on the housing front," said Robert Dye, senior economist at PNC financial services group. Especially considering"weak consumer confidence and ongoing rapid deterioration in labor markets."
Still, December's existing home sales are down 3.5% compared with December of 2007, when the seasonally-adjusted, annual sales rate was 4.91 million. Existing homes include single family homes, townhomes, condominiums and co-ops.
For all of 2008, there were 4,912,000 homes sold, which was the lowest volume since 1997, when there were 4,371,000 homes sold. Sales volume in 2008 was down 13.1% from the 5,652,000 existing homes sold in 2007.
Bargain hunters: Bargain prices are bringing buyers back into the market. The median existing home price was down 15.3% to $175,400 from December 2007, when the median price was $207,000. The median price measures where half of the homes sold for more and half sold for less.
"Americans love a bargain, and the housing market is no exception," said Mike Larson, real estate and interest rate analyst for Weiss Research in a written statement.
Thanks to the sales increase, the number of homes available on the market decreased 11.7% in December from the previous month, to 3.68 million. That represents a 9.3-month inventory supply at the current pace of sales, down from a 11.2-month supply in November.
"That's exactly what we need to see if the housing market is ever going to get back to a state of equilibrium," said Larson.
Home prices were pushed lower by the high volume of distressed sales, which accounted for 45% of December transactions according to the report.
"The higher monthly sales gain and falling inventory are steps in the right direction, but the market is still far from normal, balanced conditions," said NAR chief economist Lawrence Yun in a written statement. He warned that the housing market is far from healthy. "Buyers will continue to have an edge over sellers for the foreseeable future."
Surge in the West: The number of homes sold nationwide was buoyed by a surge in the West, where the housing market has been hardest hit by a record number of foreclosures.
Existing home sales in the West surged 13.6% to an annual rate of 1.25 million in December, up 31.6% from a year ago. But the median price in the West was $213,100, down 31.5% from December 2007.
In the South, existing home sales increased 7.4% to an annual pace of 1.74 million in December, but that was still 11.2% lower than December a year ago. And sales in the Midwest increased 4% in December to an annual rate of 1.04 million, but were down 10.3% from the same period last year.
The Northeast saw sales edge 1.4% lower, to an annual pace of 720,000 in December, down 14.3% from December 2007.
In the months to come: Analysts said that the weakening job market would slow any recovery in housing.
On Monday morning, a slew of companies announced a massive wave of job cuts. Home Depot (HD, Fortune 500), the No. 1 home improvement retailer, announced it would eliminate 7,000 jobs, or 2% of its total workforce, while Caterpillar (CAT, Fortune 500) said it will cut 20,000 jobs.
"Unfortunately, we are seeing fast and furious [layoffs] now," said PNC's Robert Dye. "And that does add to the level of uncertainty and it does put workers and consumers on edge."
Mike Larson from Weiss Research echoed that sentiment. "It's hard to imagine a lasting turn in the housing market with thousands of layoffs being announced every few days," he said.
The Obama administration is now at work on an economic recovery plan, and Yun said that this will be critical to the revitalization of the housing industry.
"The Obama administration and Congress need to move fast to stimulate a spring sales upturn which will help to stabilize home prices and set the foundation for a sustainable economic recovery," Yun said in a statement.
Bloody Monday: More than 50,000 jobs lost
Six companies announce massive job cuts in a scary start to the week...Julianne Pepitone
NEW YORK (CNNMoney.com) -- The final week of January began with a bloodbath for the job market, as more than 50,000 more cuts were announced on Monday alone.
At least six companies from manufacturing and service industries announced cost-cutting initiatives that included slashing thousands of jobs.
About 170,000 job cuts have been announced so far this year, according to company reports. Nearly 2.6 million jobs were lost over 2008, the highest yearly job-loss total since 1945.
"It's all about the consumer, and the consumer's been hit hard," said Robert Brusca, chief economist at Fact and Opinion Economics. "It's a vicious circle as weakness begets layoffs, which beget more spending weakness."
Construction machinery manufacturer Caterpillar (CAT, Fortune 500) said Monday it will cut 20,000 jobs amid a "very challenging global business environment." The company had already planned to cut 15,000 workers since the fourth quarter of 2008, but added another 5,000, bringing the total to 20,000.
Sprint Nextel Corp. (S, Fortune 500) will cut a total of about 8,000 jobs by March 31, the company said in a release. The telecommunications company's plan is to reduce internal and external labor costs by about $1.2 billion on an annual basis.
Home Depot (HD, Fortune 500), the world's largest home improvement retailer, announced Monday it will eliminate its EXPO design center business and cut 7,000 associates, or approximately 2% of the company's total workforce. The company blamed a lack of demand for big ticket design and decor projects.
Dutch financial group ING said Monday it will take a 2008 loss of $1.3 billion and cut 7,000 jobs. The company could not comment on where the cuts would take place. ING employs around 130,000 people across 50 countries.
Pfizer (PFE, Fortune 500) said in an earnings report it would cut 10% of its staff of 81,900 and close five of its manufacturing plants. The drugmaker recently announced that it was cutting up to 8% of its research staff, or up to 800 jobs. The company already cut 4,700 jobs in 2008.
Deere& Co. (DE, Fortune 500) , the world's top farm-equipment maker, said it would cut nearly 700 jobs between factories in Brazil and Iowa.
The job cuts across sectors didn't surprise Brusca, as nearly all are weak, he said.
"The services sector is shedding jobs at a horrific pace, because that's where most of the jobs are," Brusca said. "When the consumer is in tough shape it's hard for business to do well, because it all depends on consumption or investments."
Continuing the scary trend
The cuts mark a horrific start to the week, and a brutal start to 2009. In the previous week, around 40,000 cuts were announced across multiple industries.
Wednesday, in particular, was littered with a slew of job cuts: BHP Billiton, Clear Channel Communications, Intel, Rohm and Haas Co., UAL Corp. and Williams-Sonoma all announced job cuts totaling over 27,000 positions.
Schlumberger said Friday that it will cut 5,000 jobs worldwide, with 1,000 of the cuts taking place in North America.
Also last week, Time Warner Inc.'s Warner Bros. Entertainment said it would cut about 800 jobs, or 10% of its worldwide staff in the upcoming weeks, while Microsoft unveiled its plan to cut up to 5,000 jobs - 5.5% of its global workforce.
Outlook: A recovery in sight?
Brusca said he agreed with many economists' predictions that the recession will end after the second quarter of 2009. Americans might feel the job market start to bounce back a bit sooner than expected, he said.
"These recessions are like geometry," Brusca said. "It looks like we'll have a V-shaped cycle, in that we're going into this with very sharp losses. This intense-phase recession will probably recover fairly quickly, with the job market coming out it at the same angle it came in."
In the short term, the economy and the job market are in trouble, Brusca said. But "it doesn't look like the bottom is falling out of the economy," he said.
And there's a silver lining to the gloomy clouds over America's economy.
"The good news is it's so bad right now that we will have a definite, noticeable recovery when it comes," Brusca said. "We're getting a lot of adjustment out of the way early."