The House has voted to rush an additional $2 billion into the popular but financially strapped “cash for clunkers” car purchase program. The bill was approved on a vote of 316-109. House members acted within hours of learning from Transportation Secretary Ray LaHood that the program was running out of money. Called the Car Allowance Rebate System, or CARS, the program is designed to help the economy and the environment by spurring new car sales. Car owners can receive federal subsidies of up to $4,500 for trading in their old cars for new ones that achieve significantly higher gas mileage. House Majority Leader Steny Hoyer said the new money for the program would come from funds approved earlier in the year as part of an economic stimulus bill.
A new government report shows the economy sank at a pace of just one percent in the second quarter of the year. It was a better-than-expected showing that provided the strongest signal yet that the longest recession since World War II is finally winding down. The Commerce Department says the dip in gross domestic product for the April to June period comes after the economy was in a free fall, tumbling at 6.4 percent pace in the first three months of this year. That was the sharpest downhill slide in nearly three decades. Many economists were predicting a slightly bigger 1.5 percent annualized contraction in second-quarter GDP. It’s the total value of all goods and services produced within the United States.
President Barack Obama says the $787 billion economic stimulus program he enacted within weeks of taking office is helping the economy begin to pull itself out of the recession. Obama told reporters that some of that progress is “directly attributable” to the stimulus program. He says that and other “difficult but important steps” his administration has taken over the last six months have helped “put the brakes on the recession.”
Compensation for U.S. workers has grown over the past 12 months by the lowest amount on record, reflecting the severe recession that has gripped the country. The Labor Department said that employment costs rose by 1.8 percent for the 12 months ending in June, the smallest annual gain on records that go back to 1982. The department said that for the April-June quarter, its employment cost index rose by just 0.4 percent, just slightly above the 0.3 percent rise in the first quarter, which had been the smallest quarterly gain on record.
The House has voted to restrict how Wall Street executives get paid after nine banks that took government aid rewarded thousands of their employees with bonuses topping $1 million each. The vote advances the first piece of a broader proposal by President Barack Obama to increase oversight of financial institutions. The legislation goes farther than Obama wanted by prohibiting large companies from fashioning pay incentives that encourage employees to take financial risks that could threaten the economy or the viability of the institution. The bill includes other Obama suggestions: it would give shareholders a nonbinding vote on compensation packages and prohibit directors on compensation committees from having a financial relationship with the company and its executives.
Emergency officials say a welding job likely sparked the fire at a Bryan chemical plant that forced thousands from their homes. The investigation continues at El Dorado Chemical, where the fire smolders. Authorities say air monitoring throughout the night did not detect harmful levels of toxins. The company says it will do an internal review and cooperate with the probe. The company also says it deeply regrets what it calls the “enormous inconvenience” to residents and businesses in the area. Texas A&M’s main campus in College Station reopened today. Thousands of people were forced to evacuate and at least 34 needed medical attention after the fire broke out yesterday. The plant blends and packages fertilizer and other chemicals, including ammonium nitrate, a chemical used to make explosives.
CenterPoint Energy has filed with the city of Houston and the Texas Railroad Commission to decrease the PGA portion of some customers’ bills because of falling wholesale natural gas prices. That accounts for about 60 to 70 percent of a bill. But CenterPoint also petitioned to boost base rates it charges for natural gas utility service—the remaining portion of a bill.
An Indian court has issued a warrant for the arrest of Warren Anderson. He was the head of Union Carbide when its factory in the central Indian city of Bhopal leaked tons of poisonous gas 25 years ago. The gas leak killed at least 10,000 people. It was the world’s worst industrial disaster. More than 555,000 people who survived the initial disaster are believed to have suffered after-effects. Many have died over the years from gas-related illnesses. In response to an appeal from a victims’ group, a judge ordered the arrest of Anderson, who is reportedly living in the United States. The judge also told India’s government to press the U.S. government for Anderson’s extradition. Anderson was arrested immediately after the disaster, but he left India soon afterward. The Indian government has said it doesn’t know where he is, but there was a recent report that he’s in New York’s Hamptons.
A General Motors official says the company now realizes it made a mistake when it ordered some dealerships closed earlier this year. A spokeswoman says it’s now reversed that decision for dozens of dealerships. She says GM erred when analyzing the finances on about 50 dealerships. She says it also had to reconsider the distances between some dealers. But some GM dealers note the decision came after letter-writing campaigns, as well as the lobbying of local officials. As for Chrysler, not one decision to cut nearly 800 franchises has been reversed, because the closures were a result of bankruptcy proceedings.
The receiver appointed to take over the companies run by Texas billionaire R. Allen Stanford is meeting resistance in his efforts to recover money the government says went missing in a ponzi scheme. The Securities and Exchange Commission filed an emergency motion that will be heard in federal court this evening opposing Dallas lawyer Ralph Janvey’s efforts to sue more than 600 investors for nearly $1 billion. The SEC is trying to rein in Janvey, saying his lawsuit is against innocent investors who should not have to return the money they received from investing in certificates of deposit at a Stanford-run bank in Antigua. Janvey says the money he is trying to get back from investors was money stolen from other Stanford investors.
A fund offering Texas parents a guaranteed rate on their children’s college tuition is about to go broke. The Texas Tomorrow Fund was offered between 1996 and 2003, before being changed and renamed. The plan allowed parents of young children to prepay tuition at guaranteed rates regardless of how much costs went up before their children started college. The problem is that deregulation sent prices skyrocketing, meaning the fund will need a supplement from taxpayers. Comptroller Susan Combs said the fund is nearly broke now. That means the state legislature will have to find a way to plug a gap that could reach $2.1 billion.
The annual Texas sales tax break weekend will be August 21st through the 23rd, as students prepare to return to school and other shoppers also benefit. The State Comptroller’s Office says the law exempts most clothing and footwear priced under $100 from sales and use taxes. The agency says backpacks under $100 and used by elementary and secondary students are also exempt. The item is defined as a pack with straps, for wearing on the back. The 2009 legislature expanded the items exempt from state, local and use taxes during the sales tax break period to include most school supplies costly less than $100. Examples of exempt school supplies are calculators, lunch boxes, notebooks and markers. Tax-free clothing items include coats, dresses, jackets, jeans, pants, boots, shirts and shoes.
Foreclosure rates in the Houston area remain lower than the national average, according to First American CoreLogic, as reported by the Houston Business Journal. Their data says 1.1 percent of outstanding mortgages were foreclosed in June—lower than the national rate of 2.6 percent. There have been 51,866 foreclosure filings in the Houston area in the past 12 months.
About 125 foreclosed homes in the Houston area are being auctioned this Sunday morning at the Hilton Americas Houston. Registration is online at www.auction.com or at the venue on Sunday. The auctioneers have sold 213 homes in the Houston area this year by auction for $15.4 million.
Taking advantage of record low prices for natural gas, a Houston-based energy company is spending $98 million to purchase 258 well sites in northwestern New Mexico. Most of the sites purchased by Enervest are on Jicarilla Apache tribal lands. The locations are expected to produce about 15.5 million cubic feet of natural gas per day. They were sold below value after former owner CDX Rio filed for bankruptcy protection. Enervest officials say the sale was an opportunity to expand production in the San Juan Basin, where the company believes well sites have robust potential for long-term output.
Cleanup of tar balls on south Texas beaches is nearly done and the muck is believed to have come from the same unknown source. Texas General Land Office spokesman Jim Suydam says the last of the cleanup on a portion of the Padre Island National Seashore should be completed today. Gooey oil blobs as big as basketballs were first reported washing up more than a week ago. He says that more weathered blobs were washing up as late as Thursday. Suydam told the Associated Press officials are still trying to determine where the oil came from, but it appears the same source is responsible.
Democrats on a key House committee say they have patched up their differences on a health care overhaul. They are expressing confidence they can advance the complex legislation. Liberals, moderates, and conservatives negotiated late into the night to reach a deal that would restore some subsidies to help low-to-middle income people pay their health insurance premiums. Lawmakers say it would preserve a strong public insurance option, and would cut drug costs more deeply. This is the house’s final planned day in session before lawmakers leave Washington for their annual month-long summer recess. Once committee action is completed, majority Democrats will be able to return to their districts claiming momentum on health care–even though up until recently the goal was to have legislation all the way through the House by the recess. In the Senate, bipartisan negotiators say the need additional time to produce any agreement for their committee to review.
The Agriculture Department is helping struggling dairy farmers by raising the price paid for milk and cheddar cheese through a dairy price support program. The department estimates the increases will boost dairy farmers’ overall revenue by $243 million. Agriculture Secretary Tom Vilsack said the price increase will provide immediate relief and keep dairy farmers on the farm while they weather what he called “one of the worst dairy crises in decades.” Many dairy farms around the country have been in danger of closing as milk prices have hit lows and operational costs have skyrocketed. The department says it is reviewing dairy policy to determine what changes are needed.
Amazon.com is being sued for deleting e-books that customers bought for their e-reader devices. Amazon has apologized to its Kindle customers for remotely removing copies of the George Orwell novels 1984 and Animal Farm. Amazon says it zapped the copies after it learned the electronic editions were pirated. It gave buyers automatic refunds, but it did so without notice. The lawsuit, which is seeking class action status, seeks unspecified damages for all buyers of e-books that Amazon deleted from the Kindle as well as a ban on future deletions. The suit says Amazon never told customers that it had the “technological ability or right” to remotely delete e-books bought through the Kindle store. One of the plaintiffs, a Michigan high school student, also charges that Amazon ate his homework. He says his electronic notes for an assignment to read 1984 were made useless.
The number of rigs actively exploring for oil and natural gas in the United States grew by five this week to 948. Houston-based Baker Hughes reported that of the rigs running nationwide, 677 were exploring for natural gas and 261 for oil. Ten were listed as miscellaneous. A year ago, the rig count stood at 1,951. Oil prices peaked at almost $150 a barrel last July before plunging. Today, benchmark crude for September delivery is around $68 a barrel on the New York Mercantile Exchange. Texas added two rigs. Baker Hughes has tracked rig counts since 1944. The tally peaked at 4,530 in 1981, during the height of the oil boom. The industry posted a record low of 488 in 1999.