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Thursday PM March 12th, 2009

Federal judge approves BP's $50 million plea deal…Governor Perry rejects portion of $17 billion in stimulus funds…Former Dallas Mayor Ron Kirk endorsed by Senate committee as U.S. trade representative…


A federal judge approved a highly criticized plea deal that fines BP $50 million for its criminal role in the deadly 2005 blast at its refinery in Texas City that killed 15 people. The plea deal also sentences the oil giant to three years probation. The deadly explosion at BP’s refinery also injured more than 170 people. Many blast victims objected to the plea deal, believing the fine was too low and that BP would not meet its safety obligations at the refinery. U.S. District Judge Lee Rosenthal’s decision during a court hearing came after a protracted process in which blast victims unsuccessfully appealed to the U.S. Supreme Court.

Texas Governor Rick Perry has rejected $555 million in federal stimulus money that would expand state unemployment benefits. Perry, an outspoken critic of President Barack Obama’s $787 billion stimulus bill, accepted most of the roughly $17 billion slated for Texas in the plan. But the governor turned down the unemployment benefits because he says they would require the state to increase the tax burden on Texas businesses to fund an expanded program.

Texas is getting more than $545 million in federal funding to improve energy efficiency and encourage renewable energy projects. About $327 million will go toward weatherization improvements, and another $219 million is headed for the state energy program. The funding is part of $8 billion in the American Recovery and Reinvestment Act. The weatherization plan will allow up to $6,500 per home for improvements such as insulation, sealing leaks and modernizing heating and air conditioning equipment. It will be available to families making up to 200 per cent of the federal poverty level, or about $44,000 per year for a family of four. The energy program will include efficiency upgrades for state and local government buildings.

The U.S. Senate Finance Committee has approved former Dallas Mayor Ron Kirk to be the next U.S. trade representative. The Texan is in line to steer the country’s trade policy. Kirk’s confirmation hit a bump last week when it was revealed that he, like some others nominated by President Barack Obama, had a problem with underpaid taxes. But Finance Committee Chairman Max Baucus declared the tax trouble an honest mistake, and endorsed Kirk as the best man for the job.

The government says the number of Americans filing initial claims for jobless benefits rose last week while the total jobless benefit rolls reached a new record. The Labor Department says first-time requests for unemployment insurance increased to 654,000 from the previous week’s figure of 639,000, above analysts’ expectations. The number of people receiving benefits for more than a week increased by 193,000 to 5.3 million, the most on records dating back to 1967. That’s the sixth time in the past seven weeks that the jobless claims rolls have set a new record.

The government says retail sales fell in February for the seventh time in the past eight months. While the decline was less than expected, economists are still looking for continued weakness given the battering households are taking from a prolonged recession. The Commerce Department reports that retail sales edged down 0.1 per cent last month, less severe than the 0.5 per cent drop that economists had expected. The government also revised January’s performance to show a 1.8 per cent rise, the biggest increase in three years and stronger than the one per cent gain that was originally reported.

The government says that businesses slashed inventories for a fifth straight month in January as they struggle to cope with a deepening recession. The Commerce Department said businesses reduced their stockpiles by one per cent in January, essentially in line with the 1.1 per cent drop that analysts had forecast. The five consecutive declines marked the longest stretch of reductions since inventories were cut for 15 straight months from February 2001 to April 2002, a period that covered the country’s last recession.

Retail gasoline prices across Texas slipped a penny this week to settle at $1.80 a gallon. AAA Texas reports the nationwide average price held steady at about $1.93 a gallon. The association survey of Texas found San Antonio with the least expensive gasoline, at $1.76. The highest average price statewide for gasoline was $1.98 in El Paso. AAA spokeswoman Sarah Schimmer says wholesale gasoline prices have moved up recently and “that could have an impact on pump prices.”

The net worth of American households fell by the largest amount in more than a half-century of record keeping during the fourth quarter of last year. The Federal Reserve says that household net worth dropped by a record nine per cent from the level in the third quarter. The decline was the sixth straight quarterly drop in net worth. It underscores the battering that U.S. families are undergoing in the midst of a steep recession with unemployment surging and the value of their homes and investments plunging. Net worth represents total assets such as homes and checking accounts minus liabilities like mortgages and credit card debt. Family net worth had hit an all-time high of more than $64 trillion in the April-June quarter of 2007 but has fallen in every quarter since that time.

A federal judge has approved the release of more accounts held by investors in the troubled companies owned by Texas billionaire Robert Allen Stanford. During the ten-minute hearing, U.S. District Judge David C. Godbey granted a request of the court-appointed receiver to unfreeze accounts with at least $250,000 in them. The release excludes accounts caught up in the civil lawsuit filed by the Securities and Exchange Commission against Stanford and his companies. The agency alleges that Stanford engaged in an $8 billion investment fraud. The judge did not address a request by Stanford chief investment officer Laura Pendergest-Holt to release her assets. She says the assets were improperly seized.

Some Texas lawmakers are trying to tighten the system — six years after the legislature voted to make it easier for insurers to change rates for homeowners. Some legislators held a news conference in Austin and outlined some of more than two dozen homeowners insurance reform bills. Concerns especially have been raised about protecting homeowners already struggling in a volatile economy. One bill would require the state insurance commissioner to approve all insurance rate changes before they are passed to the public. The current file-and-use system approved in 2003 allows insurers to changes rates as soon as they file a notice with the Texas Department of Insurance.

Despite halts on new foreclosures by some leading lenders, the number of households threatened with losing their homes rose 30 per cent from last year’s levels. RealtyTrac says nearly 291,000 homes in the U.S. received at least one foreclosure-related notice last month–up six per cent from January. While foreclosures are highly concentrated in the western states and Florida, the problem is spreading to states like Idaho, Illinois and Oregon as the U.S. economy worsens. There have been temporary halts to foreclosures by Fannie Mae and Freddie Mac, and major banks JPMorgan Chase, Morgan Stanley, Citigroup and Bank of America. Those companies made the pledge before President Barack Obama announced a plan to stem the foreclosure crisis, which was launched last week. Two states that contributing to the increase were Florida and New York, where temporary bans on foreclosures ended.

The Obama administration will try to reinvent a program to allow Mexican trucks full access to U.S. highways. The $410 billion government spending bill bars spending on an 18-month-old pilot program that let some Mexican trucks beyond a border buffer zone. Obama has told the Office of the U.S. trade representative to come up with legislation to create a new trucking project. The goal is to meet the concerns of Congress and U.S. commitments under the North American Free Trade Agreement. Obama’s nominee for trade representative, former Dallas Mayor Ron Kirk, awaits Senate confirmation. The U.S. bars most Mexican trucks from driving more than about 20 miles, or 75 miles in Arizona, beyond the border — amid safety concerns. The U.S. agreed to lift that ban after signing the 1994 NAFTA deal with Canada and Mexico.

It’s hard to tell there’s a recession on at the nation’s medical schools, where business appears to be booming. Responding to warnings of a looming doctor shortage, existing schools are increasing enrollment, and new ones are opening or under development. A quarter century ago, experts blamed rising health costs on what they said was a surplus of doctors performing unneeded procedures. But the president-elect of the American Medical Association — Temple cardiologist Dr. J. James Rohack — says Americans are living longer and need good doctors. This year alone, the number of accredited medical schools in the U.S. is set to grow by four to 130. Health care in America is a $2.4 trillion annual business. President Barack Obama has made overhauling health care an early priority of his administration. The U.S. will have about 750,000 doctors by 2025, about 159,000 fewer than it needs, according to the Association of American Medical Colleges. The U.S. population is expected to increase from 300 million in 2006 to 350 million in 2025, and a larger proportion will be older, thus more likely to need doctor care. Some 42,231 people applied to U.S. medical schools in 2008, and 18,036 enrolled. Four new medical schools are to accept students this year, including Texas Tech University in El Paso. Five schools are seeking accreditation and aim to begin classes in 2010 or 2011.

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