President Barack Obama has unveiled a $3.55 trillion spending plan for next year that would boost taxes on the wealthy and curtail Medicare to make way for a $634 billion down payment on universal health care. In addition to sending Congress his budget for 2010, Obama proposed a series of changes that would push spending to $3.94 trillion in the current year. That would result in a record deficit Obama projects will hit $1.75 trillion, reflecting the massive spending being undertaken to battle a severe recession. As part of the effort to end the crisis, the administration proposed boosting the deficit by an additional $250 billion this year, enough to support as much as $750 billion in increased spending under the government’s financial rescue program.
Offshore oil drilling would become more expensive, but scientists pursuing clean energy could get a windfall under President Barack Obama’s proposed budget. The proposal imposes new excise taxes on oil and gas pumped offshore. And oil companies would have to pay a fee on drilling leases they own but are not using. While the budget summary gives no specific numbers, it calls for “significant” spending boosts for energy research. It also offers money for solar, biomass, geothermal, wind and clean coal programs, and modernizing the power grid. The Energy Department’s budget totals $26.3 billion, or $1.3 billion more than President George Bush proposed a year ago. Nearly two-thirds of the money goes for nuclear weapons activities. Top executives from the major oil companies pleaded with Congress on Wednesday to expand offshore drilling to better prepare for economic growth.
The Texas Transportation Commission is moving forward with a bundle of road maintenance projects to be paid for by federal economic stimulus money. Commissioners approved an order that spends about $500 million of the state’s share of the stimulus money on road and bridge maintenance. The projects are spread throughout the state. Texas is set to get $2.25 billion in transportation stimulus money. The transportation commissioners are waiting until next week to approval $1.2 billion in major road projects to be funded with the federal cash. The panel put off that decision for a week so it can receive more additional input from legislators and others.
The number of newly laid-off Americans seeking unemployment benefits rose far more than expected last week as employers cut thousands of jobs amid a deepening recession. The Labor Department says first-time requests for unemployment benefits jumped to 667,000 from the previous week’s figure of 631,000. Analysts had expected a slight drop in claims. That’s the highest level of initial claims since October 1982, though the labor force has grown by about half since then. The number of people receiving unemployment insurance for more than one week also increased more than expected to 5.1 million. That’s the fifth straight week the jobless benefit rolls have set a new record-high on data going back to 1967.
The government says new home sales tumbled to a record low annual pace of 309,000 in January as mounting damage from the collapsed housing market pushes the country deeper into recession. The Commerce Department says that sales fell 10.2 per cent to a seasonally adjusted annual rate of 309,000–the worst showing on records going back to 1963. It also was a weaker showing than the pace of 330,000 that economists expected, and shattered the previous all-time monthly low set in September 1981.
The government says orders for big-ticket goods plunged by a bigger-than-expected 5.2 per cent in January as global economic troubles cut into demand from customers both in the United States and abroad. The latest report on U.S. factory activity, released by the Commerce Department, showed that orders had fallen for a record six straight months. The previous record–a four-month-stretch of declines–came in 1992. The weakness in January was broad based with orders for autos, metal products, machinery, computers and electrical equipment and household appliances all posting declines.
The nation’s banks lost $26.2 billion in the last three months of 2008, the first quarterly deficit in 18 years, as the housing and credit crises escalated. The Federal Deposit Insurance Corporation says U.S. banks and thrifts also more than doubled the amount they set aside to cover potential loan losses, to $69.3 billion in the fourth quarter from $32.1 billion a year earlier. Regulators say there were 252 banks in trouble at the end of 2008, up from 171 in the third quarter. The FDIC says that for all of last year, the banking industry earned $16.1 billion, the smallest annual profit since 1990.
U.S. thrifts lost $3 billion in the fourth quarter and more than $13 billion last year–a record annual loss. The Office of Thrift Supervision says net losses last year surged to $13.44 billion, from $649 million in 2007. But the fourth-quarter loss was actually better than the $4.4 billion loss in the third quarter. Thrifts last year set aside $38.7 billion for losses on bad mortgages and other loans, the highest point since 1991, due mainly to increased mortgage delinquencies. Troubled assets now account for more than 2.5 per cent of assets, up from nearly 1.7 per cent a year ago. Thrifts are important to consumer lending because they must have at least 65 per cent of their lending in mortgages and other consumer loans.
Drivers in Texas are getting some relief at the pump as retail gasoline prices tumbled eight cents this week. AAA Texas reports the average price for regular unleaded fell to $1.74 a gallon. The association attributed the decline to continued lower demand from drivers. The nationwide price for gasoline slipped almost eight cents, to $1.88 a gallon. One year ago the cost per gallon was $3.06 across Texas. AAA Texas says Corpus Christi has the cheapest gasoline this week, at $1.65, while the highest average was El Paso, at $1.95 a gallon. Association spokeswoman Sarah Schimmer says experts are finding the oil market “continues to reflect chaotic price movement.”
Weatherford International has completed its redomestication to Switzerland from Bermuda. Shares will still be listed on the New York Stock Exchange under the trading symbol “WFT.” Weatherford is a global provider of mechanical solutions and technology for drilling and production in the oil and gas industry, employing some 45,000 worldwide.
The Federal Emergency Management Agency has awarded two Texas counties more than $5.4 million in grants for their cleanup efforts after Hurricane Ike. U.S. Senator Kay Bailey Hutchison announced that Orange County is set to receive $2.88 million while Liberty County will get $2.57 million. The funds will reimburse the counties for the costs of their cleanup efforts. Ike came ashore near Galveston on September 13th. It caused widespread damage across southeast Texas counties, creating massive amounts of debris that are still being cleaned up.
The prime minister of Antigua and Barbuda is urging lawmakers to approve an emergency plan to seize property and assets owned by Robert Allen Stanford. The Texas billionaire financier is the island’s largest private employer, but he’s also in big trouble with U.S. regulators. The Securities and Exchange Commission have obtained a court order freezing his assets after suing him and accusing him and three of his companies of an $8 billion fraud. Prime Minister Baldwin Spencer said a special act must be passed by parliament to seize the roughly 250 acres of land on Antigua that belonged to Stanford’s tropical financial empire. The tiny Caribbean nation’s attorney general, Justin Simon, later confirmed that offices of Stanford International Bank and other properties would be targeted for seizure by the government.
Dietary supplements seller Mannatech has agreed to pay $4 million in restitution to settle a 2007 lawsuit filed by the Texas attorney general, who charged the company with exaggerating the therapeutic benefits of its product. Under the agreement, company founder Sam Caster must pay a $1 million civil penalty and is prohibited from any further affiliation with Mannatech. Caster, the company’s original CEO, is a current member of the board of directors. The Coppell-based company, which is publicly traded, has also agreed to stop claiming that its dietary supplements can cure or treat diseases. Texas Attorney General Greg Abbott sued the multilevel marketing company after public reports accused Mannatech of selling its supplements as cures for cancer, down syndrome and other diseases and conditions. Mannatech makes a supplement marketed as providing the body with essential sugars.
The 40th annual Offshore Technology Conference is set for May 4th through 7th at Reliant Center. Some early announcements have been made about award recipients. The OTC Distinguished Achievement Award is going to Peter Noble of ConocoPhillips for his contribution to innovative marine vehicle and floating offshore systems design and engineering. OTC’s distinguished Achievement Award for Companies, Organizations and Institutions goes to the Sakhalin Energy Investment Company for the Sakhalin II Phase 2 Project. The Heritage Award recipient is Wolfgang Schollnberger, retired from BP, for his advocacy of new technology.
The Houston Bar Association’s Houston Volunteer Lawyers Program is staffing a Tax LegalLine until nine this evening. The number is 713-759-1133, found on the KUHF Web site. Attorneys will answer tax-related questions, giving brief advice on tax issues and providing additional resources.
The Houston Independent School District is hosting a job fair for school custodians on Saturday morning at the Barnett Field House on Fairway.
The Tomball Independent School District is hosting a job fair on March 12th. The district is searching for teachers, paraprofessionals, bus drivers and child nutrition, custodial and maintenance staff. It’s set for Thursday, March 12th from 5 to 8 p.m. at Tomball Junior High School on Quinn Road.
Dynegy says its fourth-quarter loss was less than last year’s, but warned that it expects to lose money in 2009 largely because of lower commodity prices. The Houston-based company reports a loss of $7 million for the quarter ended December 31st, compared with a loss of $46 million in the year ago quarter. Revenue rose nearly ten per cent to $795 million from $724 million. The company said it now expects to post a net loss this year of $65 million to $140 million. In December, Dynegy projected 2009 results ranging from a loss of $20 million to profit of $85 million.
Chemicals maker Huntsman reports its fourth-quarter profit soared due in part to a settlement with Hexion Specialty Chemicals. But The Woodlands-based company’s adjusted results missed Wall Street’s expectations. Huntsman posted net income of $598 million, compared with $2 million in the year-ago quarter. Last fall, Huntsman let Hexion walk away from a planned $6.51 billion buyout for a $1 billion payment. Hexion had been trying to scuttle the deal for months. The payout consisted of $325 million from Hexion, $425 million from Hexion’s parent company, Apollo Management, and Apollo’s purchase of convertible senior notes worth $250 million. The company plans to keep the payout money on its balance sheet. Huntsman, for the full year, had a profit of $609 million.
A decline in “pre-need” sales is blamed for a fall in fourth quarter profit at Houston-based cemetery and funeral home operator Service Corporation International. SCI reports a net income of $9.5 million on revenue of $517 million. That’s down from $166.8 million net income on $573 million in revenue in the year-ago quarter.