CNN Sums Up Obama's First Year...Wall Street Loves Him!

CNN Panelists sum up President Barack Obama's first year and previews what his second year's priorities should be. Jobs! Jobs! Jobs! and help for Main Street.




A look at Obama's Economy at years' end 2009. Wall Street Bankers were the ONLY group that prospered. In fact 2009 was their best year yet!





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Sources: CNN, Google Maps

Black Voters Don't Believe Obama Ushered In "Change"

Poll: Obama Still Very Popular Among African-Americans, But "Thrill Is Gone"



African-Americans are extremely supportive of President Obama, but their enthusiasm appears to have dramatically dropped from earlier this year, according to a new national poll.

The CNN/Opinion Research Corp. survey, released Tuesday, also indicates that Obama's presidency appears to have made blacks more optimistic about race relations, but less than one in five believe the new president has ushered in a new era of race relations in the country.

More than nine in 10 blacks questioned in the poll approve of the job Obama's doing in the White House, far higher than 42 percent of whites who approve of his performance as president.

But when asked how they personally feel about Obama's presidency, only 42 percent of black respondents say they're thrilled, with nearly half of those questioned saying they are happy but not thrilled.

The 42 percent who are thrilled is down from 61 percent in January, when Obama was inaugurated.

"African-Americans are still big fans of the first black president in U.S. history, but the thrill is gone," said CNN Polling Director Keating Holland.

According to the poll, 51 percent of African-Americans say Obama's presidency has brought some improvement in race relations in the U.S., but only 18 percent feel it's the start of a new era. Another 23 percent say they've seen a real change in race relations over the past 11 months and 7 percent say things have gotten worse.

The survey indicates that three-quarters of blacks believe race relations will improve eventually, which is up from 49 percent of blacks who felt that way a year before Obama was elected.

"Whites take a dimmer view of Obama's effect on race relations, with a third believing that the new presidency has not changed race relations in the country and 15 percent of whites saying that Obama has made race relations worse," Holland added. "Not surprisingly, whites are less supportive of Obama, although for a notable number of whites, their negative view of the president is due to the perception that he's not been liberal enough."

The CNN/Opinion Research Corporation poll was conducted December 16-20, with 1,160 adult Americans, including 259 African-Americans and 786 whites, questioned by telephone. The survey's overall sampling error is plus or minus 3 percentage points and plus or minus 6 percentage points for the African-Americans sample.



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AIG Reneges On Promise To Return Bonuses...Where Geithner?

AIG Executives' Promises To Return Bonuses Have Gone Largely Unfulfilled


When word spread earlier this year that American International Group had paid more than $165 million in retention bonuses at the division that had precipitated the company's downfall, outrage erupted, with employees getting death threats and President Obama urging that every legal avenue be pursued to block the payments.

New York Attorney General Andrew M. Cuomo threatened to publicize the recipients' names, prompting executives at AIG Financial Products to hastily agree to return about $45 million in bonuses by the end of the year.

But as the final days of 2009 tick away, a majority of that money remains unpaid. Only about $19 million has been given back, according to a report by the special inspector general for the government's bailout program.

Some of the employees who had offered to return their bonuses have instead left the company, taking their cash with them.

Others remain at Financial Products but are also holding on to their money until they see what Kenneth R. Feinberg, the Obama administration's "compensation czar," decides about whether they should get future bonus payments they have also been promised. Feinberg, AIG and government officials have been involved in ongoing negotiations over the status of past and future bonuses at the insurance giant.

Dozens of employees have hired lawyers, bracing for a fight if AIG or government officials try to block the payments.

Cuomo has said little publicly in recent months about the AIG bonuses. On Tuesday, his office had no comment when asked about the payments.

When the controversy erupted in March, Cuomo agreed to keep the employees' identities secret as long as a significant share of the money was returned to the company. Some of them said his demand amounted to blackmail. But AIG officials said at the time that at least 18 of firm's top 25 executives had agreed to return at least some of their bonus money. "We are deeply gratified that a vast majority of FP's senior leadership have expressed a willingness to forsake their recent retention payments," the company said.

But now, the government, AIG and the employees are on a collision course. Everyone is keenly aware that another round of retention payments at Financial Products is due soon, threatening to draw public attention to the issue once again. AIG is scheduled to pay out an additional $198 million to employees in March.

"They have a contractual right to be paid this money. They put in their time, and they have performed all their obligations successfully." said Andrew Goodstadt, a New York lawyer who represents more than a dozen Financial Products employees. "They're willing to assert their contractual rights in a court of law. They have extremely strong claims."

Goodstadt said his clients include computer systems specialists, mathematicians and other employees who did not have a hand in the risky credit derivatives that brought the firm down. Rather, he said, many employees who remain at Financial Products have worked to unwind the troubled trades on its books and protect the massive taxpayer investment in AIG, whose total rescue package peaked at more than $180 billion in capital and loans.

They stuck around, he said, in large part because of the company's promise of the retention payments. In addition, Goodstadt emphasized that the company told employees in March that their offers to return bonus payments were voluntary and nonbinding.

One former Financial Products executive said some of his colleagues had stayed with the company only because they expected to receive bonus payments this coming March. After that, he said, they will have "no reason at all" to stay. "There's no more carrot," he said.

A resolution to the bonus controversy has been bedeviled by a growing lack of trust between AIG employees and the government.

Financial Products employees say they were on the brink of an agreement earlier this year that would reduce the total amount of money due in 2010 and spread those payments out over time to avoid the scrutiny that would come with a large, lump-sum payment. But they claim Feinberg scrapped that plan after he was appointed in June and urged AIG to find a way to significantly scale back the upcoming bonus payments.

People familiar with recent discussions between Feinberg and executives at AIG, including face-to-face talks with chief executive Robert H. Benmosche, said Feinberg has insisted that Financial Products employees return the money they said they would before he signs off on any deal involving 2010 compensation.

"Feinberg is adamant those pledges be honored," said one of the people. "It's non-negotiable."

They also said he has continued to urge that the amount of money due in March 2010 be reduced.

"I don't know how they resolve it now. There's no trust there," said one Financial Products executive, who, like others, spoke on the condition of anonymity because of the sensitivity of the payments. "In order to negotiate, there has to be good faith and trust, and the government has shown those two things don't exist with them."

AIG declined to provide official comment, but company officials have previously argued that it is essential to keep employees at Financial Products. While the most disastrous and risky deals have been purged from the books, AIG officials say a mass exodus of employees from the division could still wreak havoc and end up harming the government's nearly 80 percent stake in the company.

AIG said in an October statement that it was working through various compensation issues with Feinberg, "including future payments to employees of AIG Financial Products." The company noted that Financial Products employees "have until the end of the year to fulfill their commitments to return a portion of their March 2009 payment. We expect FP employees will honor their commitments."



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Sources: Washington Post, AIG, Wikipedia, Google Maps

40 States Unemployment Benefit Funds Drained

States' Jobless Funds Are Being Drained In Recession


The Recession's jobless toll is draining unemployment-compensation funds so fast that according to federal projections, 40 state programs will go broke within two years and need $90 billion in loans to keep issuing the benefit checks.

The shortfalls are putting pressure on governments to either raise taxes or shrink the aid payments.

Debates over the state benefit programs have erupted in South Carolina, Nevada, Kansas, Vermont and Indiana. And the budget gaps are expected to spread and become more acute in the coming year, compelling legislators in many states to reconsider their operations.

Currently, 25 states have run out of unemployment money and have borrowed $24 billion from the federal government to cover the gaps. By 2011, according to Department of Labor estimates, 40 state funds will have been emptied by the jobless tsunami.

"There's immense pressure, and it's got to be faced," said Indiana state Rep. David Niezgodski (D), a sponsor of a bill that addressed the gaps in Indiana's unemployment program. "Our system was absolutely broke."

The Indiana legislation protected the aid checks, Niezgodski said, but it came after a give-and-take this spring in which Gov. Mitchell E. Daniels Jr. (R) said the state had been providing "Rolls-Royce benefits" and several thousand union workers countered by protesting proposed cuts at the state capitol. In January, the legislature is slated to consider a bill to delay the proposed tax increases intended to refill the fund.

In Nevada, Gov. Jim Gibbons (R) and legislators have feuded over the unemployment program, which is $85 million in debt to the federal government, with Gibbons accusing the legislature of "callous disregard" for not setting a tax rate.

And last week, a state task force in Kentucky recommended cutting benefits about 9 percent and imposing a week's delay in their payment. The average benefit check there is about $309 a week. The task force also proposed raising taxes.

"There were some moments of high anxiety" during the negotiations between industry and labor groups, said Joseph U. Meyer, the state's acting secretary of education and workforce development. "But in the end, the realistic options became fairly apparent."

State unemployment-compensation funds are separated from general budgets, so when there is a shortfall, only two primary solutions are typically considered -- either cut the benefit or raise the payroll tax.

Industry and business groups often lobby against raising the payroll tax on employers, while unions and other worker groups protest benefit cuts.

"We want to make sure Kentucky remains competitive and also maintain an environment of fairness," Meyer said of the negotiations.

Nationally, the average tax is about 0.6 percent of payroll; the average weekly check is about $300.

The troubles the state programs face can be traced to a failure during the economic boom to properly prepare for a downturn, experts said.

Unemployment benefits are funded by the payroll tax on employers that is collected at a rate that is supposed to keep the funds solvent. Firms that fire lots of people are supposed to pay higher rates. The federal government pays for administrative costs, and in a recession, it pays for the extension of unemployment benefits beyond 26 weeks. But over the years, the drive to minimize state taxes on employers has reduced the funds to unsustainable levels.

"The benefits haven't grown -- that's not the problem," said Richard Hobbie, director of the National Association of State Workforce Agencies.

Even so, he said, he expects to see unemployment checks reduced.

A shortfall in a state unemployment fund, he said, "usually means cuts in eligibility or benefits."

In Virginia, the unemployment program has borrowed $89 million from the federal government, while Maryland has not borrowed, according to the federal data.

Wayne Vroman, an expert in unemployment insurance at the Urban Institute, said that entering the recession, state programs were on average funded at only one-third the level they should have been, according to generally accepted funding guidelines.

"If you fund a program adequately, you don't need to come to these kinds of difficult decisions," he said.

Before the recession, he said, the funding guidelines "were rarely honored."

While the amount of the states' loans from the federal government is expected to grow rapidly, it is not expected to add to the federal debt. "In the past, the federal government has always gotten its money back," Vroman said.

In the meantime, however, more states are struggling to fill the gap. West Virginia imposed a freeze on benefit levels this year, and legislators in South Carolina are considering one.

"We've obviously got problems with the fund," said South Carolina House Majority Leader Kenny Bingham (R), blaming the trouble in part on the state's unemployment rate of more than 12 percent.

The state owes about $654 million to the federal government for unemployment payments.

"We're not trying to cut benefits," he said. But "if you jack rates up, those business that are struggling to hang on, you make things more difficult."



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Sources: Washington Post, Google Maps

Democrats Need To Start Circling Their Wagons

Democrats Need To Start Circling Their Wagons

(Political Commentary By Guy-Uriel E. Charles; Duke University Law Professor)




The Democrats need to start circling the wagons; otherwise, they risk losing the house in 2010.

They need to come together, led by President Obama, and start explaining to the American people for example why this health care legislation is good for the country, why financial regulatory reform is necessary, what they're doing with respect to jobs, and that they're concerned about the deficit.

Democratic Activists may not be happy with everything that the White House is doing and what is going in a Senate and House that they control, but surely they know it is better to dictate the terms of the compromise than to have policy handed to you as a Fait Accompli.



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Sources: Politico, Duke Law School, Google Maps

Is Obama - Geithner's Anti-Foreclosure Plan A Complete Failure?

Homeowners Often Rejected Under Pres. Obama - Tim Geithner's Loan Modification Plan



Ten months after the Obama Administration began pressing Lenders to do more to prevent foreclosures, many struggling homeowners are holding up their end of the bargain but still find themselves rejected, and some are even having their homes sold out from under them without notice.

These borrowers, rich and poor, completed trial modifications of their distressed mortgage, and made all the payments, only to learn, often indirectly, that they won't get help after all.

How many is hard to tell. Lenders participating in the administration's Home Affordable Modification Program, or HAMP, still don't provide the government with information about who's rejected and why.

To date, more than 759,000 trial loan modifications have been started, but just 31,382 have been converted to permanent new loans. That's averages out to 4 percent, far below the 75 percent conversion rate President Barack Obama has said he seeks.

In the fine print of the form homeowners fill out to apply for Obama's program, which lowers monthly payments for three months while the lender decides whether to provide permanent relief, borrowers must waive important notification rights.

This clause allows banks to reject borrowers without any written notification and move straight to auctioning off their homes without any warning.

That's what happened to Evangelina Flores, the owner of a modest 902 square-foot home in Fontana, Calif. She completed a three-month trial modification, and made the last of the agreed upon monthly payments of $1,134.60 on Nov. 1. Her lawyer said that in late November, Central Mortgage Company told her that it would void her adjustable-rate mortgage, which had risen to a monthly sum above $2,000, and replace it with a fixed-rate mortgage.





"The information they had given us is that she had qualified and that she would be getting her notice of modification in the first week of December," said George Bosch, the legal administrator for the law firm of Edward Lopez and Rick Gaxiola, which is handling Flores' case for free.

Flores, 58, a self-employed child care worker, wired her December payment to Central Mortgage Company on Nov. 30, thinking that her prayers had been answered. A day later, there was a loud, aggressive knock on her door.

Thinking a relative was playing a prank, she opened her front door to find two strangers handing her an eviction notice.

"They arrived real demanding, saying that they were the owners," recalled Flores. "I have high blood pressure, and I felt awful."

Court documents show that her house had been sold that very morning to a recently created company, Shark Investments. The men told Flores she had to be out within three days. The eviction notice had a scribbled signature, and under the signature was the name of attorney John Bouzane.

A representative in his office denied that Bouzane's law firm was involved in Flores' eviction, and said the eviction notice was obtained from Bouzane's Web site, www.fastevictionservice.com.

Why would a lawyer provide for free a document that gives the impression that his law firm is behind an eviction?

"We hope to get the eviction business," said the woman, who didn't identify herself.

Flores bought her home in 2006 for $352,000. Records show that it has a current fair-market value of $99,000. The new owner bought it for $78,000 at an auction Flores didn't even know about.

"I had my dream, but now I feel awful," said Flores, who remains in the house while her lawyers fight her eviction. "I still can't believe it."

How could Flores go so quickly from getting government help to having her home owned by Shark Investment? The answer is in the fine print of standard HAMP documents.

The Aug. 25 cover letter from Central Mortgage Company, the servicer that collects Flores' mortgage payments, offered Flores a trial modification with this comforting language:

"If you do not qualify for a loan modification, we will work with you to explore other options available to help you keep your home or ease your transition into a new home."

CMC is owned by Arkansas regional Arvest Bank, itself controlled by Jim Walton, the youngest son of Wal-Mart founder Sam Walton.

A glance past CMC's hopeful promise finds a different story in the fine print of HAMP document, which contains standardized language drafted by the Obama Treasury Department and is used uniformly by lenders.

The document warns that foreclosure "may be immediately resumed from the point at which it was suspended if this plan terminates, and no new notice of default, notice of intent to accelerate, notice of acceleration, or similar notice will be necessary to continue the foreclosure action, all rights to such notices being hereby waived to the extent permitted by applicable law."

This means that even when a borrower makes all the trial payments, a lender can put the house up for auction if it decides that the homeowner doesn't qualify — assuming that foreclosure proceedings had been started before the trial period — without telling the homeowner.

Until now, lenders haven't even had to notify borrowers in writing that they'd been rejected for permanent modifications.

In January, 11 months after Obama's plan was announced, homeowners will begin receiving written rejection notices, and the Treasury Department finally will begin receiving data on rejection rates and reasons for rejections.

The controversial clause notwithstanding, the handling of Flores' loan raises questions.

"Foreclosure actions may not be initiated or restarted until the borrower has failed the trial period and the borrower has been considered and found ineligible for other available foreclosure prevention options," said Meg Reilly, a Treasury spokeswoman. "Servicers who continue with foreclosure sales are considered non-compliant."

CMC officials declined to comment and hung up when they learned that a reporter was listening in with permission from Flores' legal team. Arvest officials also declined comment.

McClatchy did hear from Freddie Mac, the mortgage finance agency seized by the Bush administration in September 2008. Freddie owns Flores' loan, and spokesman Brad German insisted that Flores was reviewed three times for loan modification.

"In each instance, there was a lack of documentation verifying that she had the income required for a permanent modification," German said.

That response is ironic, said Michael Calhoun, the president of the Center for Responsible Lending, a nonpartisan group in Durham, N.C., that works on behalf of borrowers.

"These lenders gave loans with no documentation and charged them a penalty interest rate for doing so. And now when the people ask for help, they are using extravagant demands for documentation to give them the back of their hand and continue to foreclosure," Calhoun said.

German said that Flores was sent a letter on Nov. 24, which would have arrived several days later, given the Thanksgiving holiday, informing her that she'd been rejected for a permanent modification. Flores and her attorney said she never got a letter, and neither Freddie Mac nor CMC provided proof of that letter.

Exactly one week after the letter supposedly was sent, Flores' home was sold to Shark Investments. That company was formed on Aug. 19, according to records on the California Secretary of State's Web site. Shark Investments, apparently an unsuspecting beneficiary of Flores' woes, has no phone listing. The Riverside, Calif., address on the company's filing as a limited liability company traces to a five-bedroom, four-bath house with a swimming pool.

German didn't comment on whether Flores received sufficient notice under Freddie Mac rules, or how the home could move to sale so quickly.

Flores' legal team, which specializes in foreclosure prevention, thinks that lenders and servicers are gaming Obama's housing effort.

"It seems servicers are giving people false hopes by sending them a plan, and they are using the program as a collection method, getting people to pay them with no intention of modifying the loan," said Bosch. "I believe they are using this as a tool to suck people dry."

Dashed hopes aren't exclusive to the working poor such as Flores.

David Smith owns a beautiful home in San Clemente, Calif., the location of the Richard Nixon Presidential Library. Smith purchased his five bedroom home four years ago for $1.3 million. Today, the real estate Web site Zillow.com estimates the value of Smith's home at $981,000, slightly below the $1 million he still owes on it.

Smith said he went from "making a lot of money to making hardly any" as the national and California economies plunged into deep recession. He's a salesman serving the hard-hit residential and commercial construction sector. On top of his hardship, Smith's mortgage exceeds the limits for the HAMP plan.

In late August, Smith signed and returned paperwork in a prepaid FedEx envelope to Bank of America that said it had received the contract needed to modify the adjustable-rate mortgage he originally took out with the disgraced lender Countrywide Financial, which Bank of America bought last year.

The modification agreement shows that Bank of America agreed to give Smith a 3.375 percent mortgage rate through September 2014, and everything Smith paid between now and through 2019 would count as paying off interest. He'd begin paying principal and interest in October 2019, with the loan maturing in 2037.

The deal favors the lender, but Smith, 55, jumped on it because it kept him in the home.

Armed with what he thought was "a permanent modification," Smith returned a notarized copy of the agreement and made subsequent payments on time.

In return, he got a surprising notice from Bank of America saying that his house would be auctioned off on Dec. 18.

"It looks like they're trying to sell this out from underneath me," Smith said. "My wife cries all the time."

After a Dec. 16 call from McClatchy asking why Bank of America wasn't honoring its own modification, the lender backed off.

"The case has been returned to a workout status and a Home Retention Division associate will be contacting Mr. Smith for further discussions," said Rick Simon, a Bank of America spokesman. "The scheduled foreclosure sale will be postponed for at least 30 days to allow for review of the account in hope of completing a home retention solution for Mr. Smith."

The Center for Responsible Lending says such problems are common.

"Everyone acknowledges that the system is not working well," Calhoun said.

Visit msnbc.com for breaking news, world news, and news about the economy

Gov't Mortgage Plan Provides Little Permanent Help


The Obama administration's embattled mortgage relief plan has provided permanent help to only 4 percent of borrowers who have signed up, weak results that could threaten the housing market's recovery.

Among big lenders, Bank of America Corp. had the worst performance in the Treasury Department report card released Thursday. The nation's largest lender completed just 98 modifications for the 160,000 borrowers who had signed up by the end of November. GMAC Mortgage had the most modifications of any lender, just 7,100.

About 760,000 have signed up for the program since it launched in March. But as of last month, just over 31,000 homeowners had received permanent loan modifications. Nearly the same number have fallen out of the program completely either because they missed payments or were found to be ineligible.

The report shows the administration is not going to hit its long-term target of helping up to 4 million borrowers with modified loans, said Ted Gayer, an economist at the Brookings Institution.

The more borrowers the program can't reach, the more foreclosed homes will spill onto the market, pulling down home prices. About 14 percent of homeowners with a mortgage are either behind or in foreclosure.

''Nobody really knows how big that wave will be,'' Gayer said.

The Treasury Department said it will step up pressure on the industry to improve. The administration's focus is to ''get as many of those eligible homeowners as possible into permanent modifications,'' said Phyllis Caldwell, chief of Treasury's homeownership preservation office.

When the poor progress was clear last summer, Treasury set a goal of enrolling up 500,000 borrowers by Nov. 1. With the clock ticking, many lenders started giving homeowners verbal approval for a temporary modification.

''They were going to do anything to hit that number,'' said Marietta Rodriguez, national director of homeownership programs at NeighborWorks America.

Under the program, eligible borrowers who are behind or at risk of default can have their mortgage interest rate reduced to as low as 2 percent for five years. They are given temporary modifications, which are supposed to become permanent after borrowers make three payments on time and complete the required paperwork, including proof of income and a financial hardship letter.

Lenders blame the low success rate on borrowers who don't return the necessary paperwork to complete the process.

But Michael Heller of Salinas, Calif., says he and his wife have submitted all of the required documents and made six months of $1,800 payments to JPMorgan Chase & Co., but have yet to receive an answer.

''Every time we send them documents, they send us a form letter that says your modification is risk, you screwed up, you didn't send us the necessary documents,'' said Heller whose landscaping business has taken a severe hit due to the recession. He figures the house he bought for $640,000 in 2006 is now worth $250,000.

''You never talk to the same person twice,'' he said. ''It makes you a little bit kooky. This has been extremely stressful.''

JPMorgan Chase had no immediate comment on their case.

Mike Brauneis, director of regulatory risk consulting at consulting firm Protiviti Inc., predicts that only 20 percent of borrowers who were verbally approved for modifications will ultimately sign up.

''Either people qualify verbally and never send their paperwork in, or they send it in and the numbers are different,'' he said.

Wells Fargo & Co. has enrolled about 3,500 homeowners in the Obama program so far. There are 14,000 more who have completed all their paperwork and are likely to finish the process soon. Another 9,000 have made three payments but haven't sent back any documents, while 11,000 have sent some paperwork.

''We're going to do all we can to try to get their attention,'' said Cara Heiden, co-president of Wells Fargo's mortgage division.

Bank of America said it is trying to reach 50,000 customers who have completed three payments but are missing some or all documents. It said its ''momentum in converting customers to permanent modifications'' will show results this month.

Some borrowers, who lied about their incomes when they originally took out their loans, still aren't able to show proof. During the housing boom, the lending industry didn't require borrowers to prove their income, and those loans are highly concentrated in the states hardest-hit by the housing bust.

More than half of loans made in California and Nevada from 2004 to 2007, for example, required little or no documentation, according to research firm First American Core Logic. Nationally, about 4.3 million of those loans were made during the boom years.

''You definitely have a group that shouldn't be in the loan in the first place'' said Terry Moore, managing director of consulting firm Accenture's North America banking practice.

A watchdog report this week said the government effort ''appears capable of preventing only a fraction of foreclosures'' and that only $2.3 million out of a potential $75 billion government commitment had been spent.

Steve Carpinelli, 39, of Alexandria, Va., thought he'd be a natural candidate for the Obama plan, after seeing his income drop 35 percent from about $65,000 two years ago. He's struggling, but has still made his monthly mortgage payments so far.

Though he was initially approved for a temporary modification, made four trial payments and sent back the necessary paperwork, Citigroup Inc. denied him last month.

''It is the most grueling processes I have ever been through financially,'' Carpinelli said.

A Citi spokesman declined to comment on his case but said, ''if the borrower does not qualify, we look for other potential loss mitigation solutions.''




NACA Continues Promising Mortgage Modifications Despite BBB Complaints



The Neighborhood Assistance Corporation of America, or NACA, promises to help struggling homeowners save their houses from foreclosure. But are those promises kept?

This weekend NACA will stage one of the organization's Save the Dream events in Charlotte. At a similar event in Columbia, S.C., earlier this year, 30,000 people showed up looking for assistance.

"We're the one shining light in the country when it comes to foreclosure prevention and restructuring mortgages to make them affordable," said NACA CEO Bruce Marks at a news conference to announce the Charlotte event.

But the president of the Better Business Bureau in Charlotte, Tom Bartholomy, said that is a bit overstated.

"There's nothing that they do that is more special than any other mortgage broker or lender will do for you," Bartholomy said.

In Charlotte, the BBB has logged 5 complaints against NACA. Nationally, there have been 63 complaints.

"At the end of it all, it comes down to that what they promised going in, they weren't getting at the end of it all," said Bartholomy.

Because NACA has helped thousands of satisfied homeowners across the country, the number of complaints is relatively small, so the BBB still gives NACA a B+ rating.

Katoma Cardwell was a NACA employee until he turned up at the news conference Tuesday afternoon. He admits he is in a pay dispute with the organization but also wanted to question CEO Marks about his claims.

"He is trying to distort what type of success NACA is currently able to provide for their members," Cardwell said.

Security guards barred Cardwell from going inside, telling him he had been fired.

A NACA executive who came outside told Cardwell, "Obviously you are attacking the organization so you can go through human resources to discuss anything further."

NewsChannel 36 questioned Marks about Cardwell's claims. Marks said, "There are some people that want to make a name for themselves by being on the media but we are focused on getting the job done."







More tax dollars for the self-proclaimed Bank Terrorist

Despite receiving taxpayer money, NACA doesn’t provide public reports on either its loan-brokerage business or its campaign to modify mortgages. Jim Campen, an economics professor emeritus at the University of Massachusetts, Boston, says he tried in the 1990s to analyze the performance of loans arranged by NACA, but Mr. Marks refused to provide data.

Mr. Marks says he feared the data would be used by another nonprofit to discredit his group. NACA does provide information to lenders that work with it, he says, but sees no duty to disclose it to the public.

“He’s been very effective in shaking money out of the banks,” says Mr. Campen, but “he’s not one to open up his records to public scrutiny.” Wall Street Journal
Article dated * May 20, 2009





NACA’s “Save the Dream Tour” Now Disappointing Thousands in Phoenix


It started this past July 31st and went through August 3rd, and 40,000 very nervous homeowners waited in long lines in the hopes of saving their dreams.

One woman, a 46 year-old single mom who had lost her job, fallen behind on her bills, but was working again, waited apprehensively to find out if her lender, Wells Fargo, would modify her loan or throw her out in the street. (I know that’s a harsh way of putting it, but I’ve decided that there’s been enough soft pedaling on this point.)

The event was yet another brought to homeowners by the Neighborhood Assistance Corporation of America, or NACA for short. The event’s brochure promised “Same Day Solutions” for homeowners who would get their loan modifications approved on the spot by many of the largest lenders and servicers in the country.

Bank representatives, dressed in their golf shirts with embroidered bank logos, would be on hand and would get things done for homeowners on a while you wait basis. NACA, a nonprofit based in Boston would be there with hundreds of housing counselors.

Wow. When I first heard about this whole “Save the Dream” thing, I thought it sounded absolutely fabulous.

When our single mom left the event that day she felt terrific. She was confident that her home would now be saved. A NACA housing counselor had reviewed her financial documents, and then she had met with a representative from Wells Fargo, who had agreed to modify her loan, taking her interest rate down from 6.375 to 4.375, and cutting her payment by more than $200 a month. Wells also agreed to a forbearance agreement that would allow her to skip the next six payments, and tack the amount onto the back end of the loan.

She was so happy.

The Wells Fargo representative couldn’t give her a written agreement, but it was a direct contact with her lender, and she watched as the representative wrote her name down along with her phone number and the promised interest rate… right on her NACA workbook.

She was so happy.

Fast forward to September 22nd, eight weeks later when she received a letter from Wells Fargo that specified very different terms than she was promised. In the letter it said that at the end of a six-month moratorium on payments, she would have to pay a balloon payment of all six payments missed.

So, as you might expect, our single mom tried to call her Wells Fargo representative at the number she had been given while she was saving her dream two months earlier… but she was never put through to her. Instead, Wells Fargo now told her to stand by… because Wells would be contacting her in a few months, at which time she could apply for a loan modification! And even better, Wells now said that it had no record of the agreed to interest rate reduction.

So, next she called NACA, left voice mails and sent emails but never got a response. And wouldn’t you know it… the identification number that she was given to track her file online on the NACA website didn’t work. Darn the luck.

So, now our single mom is concerned. She’s facing a balloon payment in January and is once again scared that she will lose her home… the home she purchased in 2002 with a 20% down payment…. the home in which she has close to 50% equity, but can’t refinance because of her credit score.

Now she’s angry. Very angry, I would think.

Here’s what she told the St. Louis Beacon:

“I’m angry at both the bank and the organization — Wells Fargo and NACA. Is the idea of ’scam’ in my mind? Yes. And that’s a quick turnaround for me. But, it was a very difficult 40-minute call I had with the bank — to see what I thought was a gift, of sorts, a break, just kind of disintegrate.”

NACA’s CEO is Bruce Marks, and he’s known for his outrageous acts in defiance of banks. I read about the guy and frankly, had to like him. For a while, he was delivering old, crummy furniture to the front lawns of bank executives on weekends. Pretty cool, right? Now I’m not so sure.

When Bruce was asked for numbers on how many St. Louis homeowners have received loan modifications and how many are in some sort of pending status, all he would say is that “it’s a rolling number”. It’s apparently a number that rolls. Bruce went on to say that that the focus would be on completing pending cases before the tour would resume in Los Angeles in late September. The “vast majority” will be completed by the end of this week, he told the St. Louis Beacon.

Were they? I don’t know. I can’t find any published numbers anywhere. I sure hope “the vast majority” of the 40,000 people that attended the NACA “Save the Dream” event… had their dream saved.

But I’m skeptical. Because when you consider that, according to the administration’s report cards that were published on August 9th, Bank of America only modified 4% of its eligible loans. Bank of America is the country’s largest mortgage holder, so it seems hard to imagine that the “vast majority” of 40,000 homeowners could save a dream out of that 4%. Maybe I’m not getting the math right.

At least NACA provides their housing counselor services FREE! That’s right, they don’t charge any of those distasteful up front fees everyone is so concerned about. Nope, NACA gets their money the old fashioned way… from the taxpayers… well, from the government who gets their money from the taxpayers. In fact, NACA recently got $16 million in government funding to provide housing counselors to distressed homeowners. But that’s not considered an up front fee, I suppose. So, you see… that’s free right there.

Oh, and one more thing… just for fun I looked up NACA on the Better Business Bureau Website and guess what? You guessed it… an ‘F’.

NACA’s Save the Dream? Or just another government funded nightmare?



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Sources: McClatchy Newspapers, Huffington Post, Wall Street Journal, NY Times, MSNBC, Michelle Malkin, WISTV, WCNC, NACA, Whitehouse.gov, BBB, Youtube, Google Maps

Federal Reserve Pledges To Keep Interest Rates Low

Fed leaves key rate unchanged. A CNBC panel analyzes the Federal Reserve's decision to leave a key interest rate unchanged and discusses the effect on the market and mortgage rates.

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Fed Keeps Extended Period Pledge, Sees Rebound


The Federal Reserve repeated its pledge to keep interest rates “exceptionally low” for “an extended period” and said the economy is strengthening.

“Household spending appears to be expanding at a moderate rate, though it remains constrained by a weak labor market, modest income growth, lower housing wealth, and tight credit,” the Federal Open Market Committee said in a statement today after meeting in Washington. “Businesses are still cutting back on fixed investment” and “remain reluctant to add to payrolls.” Deterioration in the labor market is “abating.”

Chairman Ben S. Bernanke, who faces a confirmation vote for a second term by the Senate Banking Committee tomorrow, is battling what he calls “significant headwinds” of declining credit and continuing job losses. While the economy has returned to growth after the deepest recession since the 1930s, most economists surveyed by Bloomberg News predict the unemployment rate will exceed 10 percent through June. Consumer spending is still below its level of two years ago.

Officials kept their benchmark overnight lending rate between banks in a range of zero to 0.25 percent, where it has been for a year. Policy makers restated that low interest rates are contingent on “low rates of resource utilization, subdued inflation trends, and stable inflation expectations.”

“Inflation will remain subdued for some time,” the statement said. The consumer price index, minus food and energy, rose 1.7 percent for the 12 months ending November, unchanged from October, the Labor Department reported today.

The dollar was little changed against the euro after the decision, while stocks pared gains. Treasury notes advanced.

Agency Purchases, Liquidity

The Fed said it will continue purchases of agency mortgage- backed securities totaling $1.25 trillion and about $175 billion of agency debt through the first quarter of next year. The FOMC and the Fed’s Board of Governors reiterated that “most of the Federal Reserve’s special liquidity facilities will expire on Feb. 1 2010.” The Fed also said it’s working with other central banks to close temporary liquidity swap arrangements by Feb. 1.

“The Federal Reserve expects that amounts provided under the Term Auction Facility will continue to be scaled back in early 2010,” the statement said.

The decision was unanimous.

The FOMC met after a week of reports suggesting economic growth picked up in the fourth quarter. Retail sales climbed 1.3 percent in November, twice as much as anticipated in a Bloomberg News survey of economists. Inventories rose in October for the first time since August 2008, and exports in the same month increased to the highest levels in 11 months.

Forecasts Raised

The numbers led economists at Goldman Sachs Group Inc. and JPMorgan Chase & Co. to raise their forecasts for fourth quarter growth by a full percentage point. JPMorgan lifted its estimate to a 4.5 percent annual growth rate in the final three months of 2009, compared with a previous prediction of 3.5 percent. Goldman economists increased their estimate to 4 percent from 3 percent. Gross domestic product grew 2.8 percent in the third quarter after shrinking for each of the previous four quarters.

“There is more of a self-sustaining dynamic developing,” Julia Coronado, senior U.S. economist at BNP Paribas SA in New York, said before the announcement. “We are still in a very deep hole.”

Previous Recessions

Consumer spending, which fell the most since 1980 during the recession, rose to $9.25 trillion on an annual basis in the third quarter. Purchases were still below the pre-recession peak of $9.36 trillion in the fourth quarter of 2007.

By contrast, consumption grew every quarter of the March to November 2001 recession. In the 1990 slump, which began in the third quarter of that year, consumption surpassed the pre- recession peak in the third quarter of 1991. The downturn ended in the first quarter of that year.

Each of the last three recessions has seen a slow recovery in employment, though the jobless rate is higher now than at the end of the previous two slumps. While the economy grew in July to September, unemployment jumped to 10.2 percent in October and was 10 percent in November. The rate continued to rise past the November 2001 trough in economic activity, peaking at 6.3 percent in June of 2003. The prior recession ended in March of 1991, and unemployment continued to rise until peaking in June 1992 at 7.8 percent.

GE, Caterpillar

General Electric Co. is ready to go “back on offense” next year after slimming its portfolio and maneuvering through the worst of the finance arm’s challenges, Chief Executive Officer Jeffrey Immelt said during his annual investor meeting in New York yesterday. Caterpillar Inc., the world’s largest maker of bulldozers and excavators, aims to bring back some laid-off workers next year as sales improve, Chief Executive Officer Jim Owens said in a Bloomberg TV interview on Dec. 11. The company cut about 18,700 full-time jobs since Dec. 2008 as the global recession eroded demand.

The economic reports are “unlikely to materially affect the committee’s outlook for next year,” Laurence Meyer, a former Fed governor and vice chairman of Macroeconomic Advisers LLC said before the decision. They “may give the committee more confidence in its expectation that a sustainable recovery is underway.”

Fed officials said last month the economy will grow 2.5 to 3.5 percent next year, fast enough to bring the unemployment rate down only to 9.3 to 9.7 percent in the fourth quarter, according to their central tendency estimates.

Production Gain

Factories in the U.S. made more goods in November than anticipated, extending a rebound in manufacturing that will give the world’s largest economy a lift into 2010. Production in November was still below the average level of the past two years.

The 56-year-old Fed chairman has focused on restoring liquidity and credit in the U.S. financial system, expanding the central bank’s balance sheet to $2.18 trillion in the process.

Stocks have rallied as low interest rates have caused investors to seek higher returns. The Standard and Poor’s 500 Index is up about 23 percent this year. The Fed’s mortgage purchases helped push rates on a 30-year fixed-rate loan to 4.71 in the week ending Dec. 3, the lowest since mortgage buyer Freddie Mac of McLean, Virginia began keeping records in 1971.

Stiglitz, Phelps

Nobel prize-winning economists Edmund Phelps and Joseph Stiglitz of Columbia University in New York both warned last week that growth is at risk if businesses don’t start adding more jobs. Pitney Bowes Inc., the Stamford, Connecticut maker of office automation equipment and software, said Dec. 15 it expects to cut 10 percent of jobs in a reduction program that will continue into 2010.

“The fact that the stock market is up or that credit markets are less frozen should not distract us from the problems ahead,” Stiglitz told the Joint Economic Committee of Congress on Dec. 10. “These problems are especially grave in the labor market.”

While the unemployment rate dropped two tenths of 1 percent in November, the duration of unemployment reached another high, and weekly wages “are essentially stagnating,” Stiglitz said.

The Fed is unlikely to change interest rates until the third quarter of 2010, according to the median projection of 62 economists surveyed by Bloomberg News in the first week of December.

“The Fed is looking at a variety of indicators beyond some normalization in the pace of economic growth,” Dan Greenhaus, chief economic strategist at Miller Tabak & Co. in New York, said before the statement. “You need strong growth to drive employment, and you need strong employment to drive spending.”


Sources: Bloomberg.com, MSNBC, CNBC

Jesse Jackson & Tim Geithner Meet To Talk Jobs

Geithner meets with Jesse Jackson



US Treasury Secretary Timothy Geithner was set to meet Wednesday afternoon with the Rev. Jesse Jackson to discuss the economy and job creation. Their meeting is closed to the press.

Jackson's not the only source of liberal pressure that Geithner's encountering Wednesday. The Treasury chief also sits down in the evening with the Congressional Progressive Caucus for a conversation about financial regulatory reform.



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Sources: Politico, Google Maps

Obama Pitches "Cash For Caulkers" Idea To Jobless Voters

Big banks promise more Lending, incite anger

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Pres. Obama Pitches "Cash for Caulkers" at Home Depot


AT HOME DEPOT: Speaking at a Home Depot in Northern Virginia, President Obama recognized Sens. Mark Warner (D-Va.) and Jeff Merkley (D-Ore.) and Reps. Gerry Connolly (D-Va.), Jim Moran (D-Va.) and Peter Welch (D-Vt.) Commenting on the ubiquitous Home Depot aprons, Obama joked: "What, the senators are too cool to put it on?"

Then, on to the message of the day: "From the moment we took office … we began investing in newer, stronger foundations for lasting growth. One that would free us from the cycle of boom and bust that has been so painful. One that would create good jobs and opportunities for a growing middle class," Obama said. "Clean energy can be a powerful engine for that kind of growth."

Good news: “I just received a report from Vice President Biden that confirms that as a result of the steps that we’ve taken, a major transformation of our economy is well under way. We are on track to double renewable energy production … by the year 2012.”

"The simple act of retro-fitting”" - installing new windows, doors, cooling and heating equipment, etc. - "is one of the fastest, easiest and cheapest things we can do to put Americans back to work while saving money and reducing harmful emissions," Obama continued. (11:19 a.m.)

POTUS said he thinks energy efficiency and retrofitting are "sexy."

"I know the idea may not be very glamorous, although I get pretty excited about it," Obama said.

"Insulation is sexy stuff," he added. "Here's what's sexy about it: saving money."

NOD TO THE HOSTS: "It's fitting that we're here today at Home Depot with folks who play a vital role in helping America’s families build strong homes and strengthen the ones they’ve got," Obama said. "'Cause that’s what we’re trying to do: rebuild America’s house, on a foundation of growth and prosperity."

HAVING IT ALL: "A lot of times, there's an argument about economic growth versus the environment. And with the debate that’s going on about climate change right now, a lot of people say we can’t afford to deal with these emissions to the environment. But the fact of the matter is, energy efficiency is a perfect example of how this can be a win-win," he argued.

Obama wrapped up: "I'm excited about it, and I hope you are, too. See, I told you, insulation's sexy."



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Sources: Politico, MSNBC, Google Maps

Labor Unions Angry At Obama Over Job Growth & Economy

For Labor, there's always next year


It’s not been the year that labor had hoped for when it helped Democrats seize control of both Congress and the White House in 2008.

The top labor legislative priority, a measure easing union organizing rules, hasn’t seen so much as a committee vote after negotiations over modified language took a back seat to passage of health care reform.

Some members have grown frustrated with President Barack Obama’s decision to push health care as his first domestic priority, rather than focusing on economic recovery.

And those feelings only intensified as the unemployment rate rose and automakers and other labor-dominated industries took debilitating blows during the economic downturn.

Now, labor leaders are trying to defeat a Senate proposal to raise money for health care reform by taxing so-called Cadillac health insurance packages, which could apply to some union members.

Gerald McEntee, the president of the American Federation of State, County and Municipal Employees, recently applauded Senate Democratic leaders for working to produce a reform bill but insisted there be “no taxes on middle-class health plans” in it.

To be sure, health care reform has been a goal of union leaders for a long time, and they are still working with Congress to win passage. But labor’s top priority — passage of the Employee Free Choice Act — was in trouble almost the moment the Democrats were sworn in, stalled by the unexpectedly long effort to fill their filibuster-proof Senate roster.

First, labor advocates had to wait until the contested Senate race in Minnesota was settled and Democrat Al Franken was seated. Then the death of Sen. Ted Kennedy (D-Mass.) caused further delay.

Backers of the bill are hoping it will re-emerge as a congressional priority once health care moves from center stage. But even then, it’s unclear whether Sen. Tom Harkin (D-Iowa) has been able to hash out language acceptable to the moderates and conservatives in his caucus — a task made all the more difficult by the looming midterm elections.

Still, labor advocates remain hopeful.

“The Employee Free Choice Act fell victim to the same thing a lot of legislation did: to the health care debate,” said Josh Goldstein of American Rights at Work.

As the White House and Congress prepare to shift their focus to job creation and the economy, Goldstein said, the labor bill may have a more natural place in the debate.

The act, which aims to make it more difficult for management to interfere with union-organizing elections, “plays into the broader debate because it raises the question about what kind of jobs we are creating — good-paying jobs that can’t be outsourced,” said Goldstein.

All this is not to say that labor hasn’t seen any rewards from the new administration.

Obama’s pro-labor appointments are shifting the balance of power away from long-held management advantages.

Labor Secretary Hilda Solis has revoked and eroded several policies that were opposed by union leaders, including Bush-era disclosures of labor union spending.

The National Mediation Board, which oversees airline and railroad worker unions, is currently taking comment on a rule change that could significantly ease the ability of workers in those industries to unionize.

Expected early next year, the ruling could have real-time impact. The Northwest and Delta airline merger last year brought together a mix of workers, with some Northwest employees unionized and some Delta workers not unionized. The Association of Flight Attendants is holding off until the mediation board acts to organize a vote that could unite the merged work force of flight attendants under one contract in the new Delta structure.

The proposed rule change affects how the unionizing votes are counted. For 75 years, transportation workers, unlike others, have had to win the votes of a majority of the work force in order to unionize. Under the new rule, the workers could organize if they won a majority of the votes cast, even if the number of workers voting didn’t represent a majority of the entire work force.

Historically, the higher standard has been justified because of the critical nature of the transportation infrastructure in interstate commerce. Rail and airline unions also are required to negotiate longer contracts, another condition aimed at limiting disruptions in the free flow of people and products on those systems.

The Transportation Trades Department of the AFL-CIO, which is seeking the ruling, argues that the higher bar is unfair and imposes a standard on unions that is higher than that for electing U.S. senators.

“There are tens of thousands of airline and rail employees that would like a fair and unfettered chance to choose if they’d like a union,” said Ed Wytkind, president of the Transportation Trades Department, which includes 32 unions.

“This is no longer the 1930s or the 1950s. The employers just want to keep everything the way it is because it works really well for them,” he added.

Katie Packer, executive director of the Workforce Fairness Institute, argues the system is working as intended and shouldn’t be changed.

“These people are responsible for keeping things moving in our economy, [which] makes [them] different than a hotel worker,” she said.

If a hotel union stages a work slowdown or a strike, “then somebody’s hotel room doesn’t get cleaned,” she added. “If that happens in the airline industry, the entire airline system could come to a halt for a period of time.”

Opponents of the rule change are also challenging the process the mediation board is employing to make the change.

In 1987, the last time the board dug into the issue, it held an evidentiary hearing that included testimony and the cross-examination of witnesses. The board had competing petitions then: one to change the voting process and another to make it easier to decertify a union.

The board ultimately rejected both. In a similar showdown last year, the board declined to address the issue but said, if it did, it would follow a similarly formal review of the arguments.

This time, the two Democratic members of the three-person board — including Obama appointee Linda Puchala, a former labor leader and board mediator — decided to hold a public hearing and accept written testimony rather than hold an evidentiary hearing.

The decision prompted a strong objection from the board’s lone Republican and a threat from the airline industry.

“The board’s dramatic and unexplained abandonment of its prior procedural and substantive standards in order to push through an ill-advised rule change in a manifestly politicized manner simply means that once the political winds change — and the board’s composition changes with them — organized labor will pay the price,” with a return to the higher voting standard and new rules to make it easier for workers to kick a union out, warned Bob Siegel, an attorney for the Air Transport Association, an airline trade association.

But Wytkind dismisses the criticism. “This is a shift in policy that is long overdue and the other side just doesn’t like, and they are throwing grenades,” he said.


Sources: Politico, AFL-CIO, Facebook

House GOP Refuses To Continue Raising National Deficit

House budget splits defense, jobs



A year-end budget bill taking shape in the House on Monday night would meld $626 billion in new defense spending with a set of pared-back tax- and unemployment related provisions designed to get through the Senate without a prolonged fight.

At the same time, the leadership has opted to pursue a second, more robust job-creation package that will allow the House to speak on the issue but with no anticipation of Senate action before January.

What’s evolved then is a two-bill strategy with the primary focus this week on finalizing the budget package that will carry must-pass measures to extend the estate tax and authorize billions in extended jobless benefits.

“Our whole interest in life today is what can get through the Senate,” said House Majority Leader Steny Hoyer (D-Md.)

Over Pentagon protests, the defense chapter in the bill is expected provide an estimated $2.5 billion for the purchase of 10 more of Boeing’s C-17 transports, and $465 million is included for the continued development of a second engine for the F-35 Joint Strike Fighter. But elsewhere, Defense Secretary Robert Gates largely gets his way, including a full order of 30 F-35 fighters and the terminations he wanted of funding for the F-22 and VH-71 presidential helicopter programs.

Included in the package is $128 billion in contingency funds for on-going military operations in Iraq and Afghanistan. And the Pentagon is expected to seek at least $35 billion more next year to help cover the cost of President Barack Obama’s decision to add up to 33,000 more U.S. troops.

As seen in the bill now, the ripple effect of this buildup is already being felt.

There has been increased pressure to add funds for the purchase of more armored vehicles able to cope with the rough Afghan terrain. The final core defense budget is expected to include an additional $825 million for this purpose on top of the administration’s request. And as proposed by the Senate months ago, hundreds more vehicles would be purchased by trimming back on spending for the training of Afghan security forces.

Hoyer’s goal is to get the bill to the House floor by Wednesday, but it’s no longer certain that Democrats will use this measure to address the sensitive issue of expanding Treasury’s borrowing authority to finance the growing federal debt.

Just a week ago, the Maryland Democrat had hoped House and Senate leaders could join forces on the defense bill to raise the ceiling by as much as $1.8 billion — enough to carry the government through next year and the 2010 elections. But this proved nerve-racking for Senate moderates, who are insisting on the creation first of an independent commission to force Congress to do more to address deficit reduction.

Hoyer is still pursuing some resolution of the issue. Even as the House bill moves forward, he remains in negotiations with Senate Budget Committee Chairman Kent Conrad (D-N.D.) over such a task force, already championed by 33 senators including 14 Democrats.

“I haven’t given up on that,” Hoyer told POLITICO. And if agreement can be reached, a long-term increase in the debt could still be added by the Senate and sent back to the House together with a compromise on the Conrad-backed deficit commission.

The senator himself has said he is open to giving Treasury the authority to borrow what it needs for a short term period—perhaps two months. But where this goes is ticklish still.

Threading the Senate needle is complicated by the fact that some liberals oppose the defense funding itself because of their opposition to the wars overseas. So it could be that the debt debate shifts to what would be a third hastily assembled vehicle, a stop gap spending bill to keep agencies operating while the budget bills are resolved.

As these many scenarios suggest, the whole year-end exit strategy is still evolving and something of a roll of the dice.

With Christmas next week, House leaders are anxious to send their members home for the holidays — but it’s proven difficult to get a clear read from Senate Democrats, who are consumed by the ongoing health care reform debate.

To appease the Senate and hold down costs, House Democrats are prepared to pare back plans to authorize a full one-year extension of benefits for the long-term jobless. Instead, any extension will be close to six months, costing $40 billion, and this may have to be reduced further, Democrats said Monday night.

At the same time, liberals are desperate to preserve some job creation and infrastructure investments. Tempers are frayed, and the two-track approach on jobs is born of this frustration.

In a remarkable effort to force the Senate’s hand, House Appropriations Committee Chairman David Obey (D-Wis.) went so far last week as to actively pursue a strategy of providing only stop-gap funding for the Pentagon, thereby freezing out billions of dollars in home-state projects added by lawmakers in both chambers.

At one level, it was an anti-pork-barrel statement in the name of helping the unemployed. On the other, it would have put Democrats in the untenable posture of freezing defense funds in the midst of two wars.

A more peaceful approach, taken by tax writers, seeks to minimize their differences with the Senate by scaling back the scope of the bill. The House will insist on perhaps a one year extension of the current estate tax, which otherwise drops to zero in January. But tax writers have agreed that they can afford to wait before renewing billions of dollars in often popular tax breaks due to expire at year’s end.

Since many won’t affect tax filings until April 2011, there is a longer window for Congress to act. But the biodiesel industry is anxious, since transactions in January would be immediately impacted by the removal of the credit to encourage the blending of diesel with biofuels.

Watching from the sidelines, California Rep. Jerry Lewis, the ranking Republican on the House Appropriations Committee, complained that Democrats were creating a “hodgepodge” and should just let the defense agreement — finalized over the weekend — stand on its own.

“Let me make it easy for my Democrat colleagues,” Lewis said in a statement late Monday. “Put a clean Defense Appropriations bill on the floor, let members and senators cast a vote they can be proud of and send our troops and their families the resources they need and deserve.”


Sources: Politico