WASHINGTON — Making a last-ditch effort to save his health care overhaul, President Barack Obama on Monday put forward a nearly $1 trillion, 10-year compromise that would allow the government to deny or roll back egregious insurance premium increases that infuriate consumers.
Posted Monday morning on the White House Web site, the plan would provide coverage to more than 31 million Americans now uninsured without adding to the federal deficit. It comes just four days before Obama’s one-of-a-kind, televised health care summit with Democrats and Republicans.
Even with the latest changes, it’s highly uncertain such an ambitious proposal can get through Congress. Republicans are virtually all opposed, and some Democrats who last year supported sweeping health care changes are having second thoughts in an election year. After a year in pursuit of what was once his top domestic priority, Obama may have to settle for a modest fallback.
Weeks ago, the president and congressional Democrats were on the verge of an historic step — a long-sought remake of the nation’s health care system after a half-century of unsuccessful attempts by scores of politicians. Then Republican Scott Brown stunned Washington with an upset win in the Massachusetts Senate race, denying Democrats their 60-seat majority and reversing any political momentum.
Determined to avoid facing voters empty-handed, Obama offered a fresh proposal based on Democratic-passed bills.
The plan conspicuously omits a government insurance plan sought by liberals and viewed as a non-starter by conservatives and some congressional moderates. It includes Senate-passed restrictions on federal funding for abortion that have been adamantly opposed by abortion foes as well as abortion rights supporters.
The new White House plan would give the federal government the power to regulate the health insurance industry much like a public utility. The Health and Human Services Department — in conjunction with state authorities — would be able to deny substantial premium increases, limit them or demand rebates for consumers.
Obama, who deferred to Congress on the specifics for more than a year, has finally put forward a detailed plan of his own. By and large, it follows the bill passed by Senate Democrats on Christmas Eve, with changes intended to make it acceptable to their House counterparts.
It would require most Americans to carry health insurance coverage, with federal subsidies to help many afford the premiums. Insurance companies would be barred from denying coverage to people with medical problems or charging them more.
The plan dramatically scales back a Senate tax on high-cost health insurance plans objected to by House Democrats — and labor unions. Instead of raising $150 billion over 10 years, it would bring in just $30 billion, the administration said. A Medicare payroll tax increase on upper-income earners would help plug the revenue gap. For the first time, Medicare taxes would be assessed on investment income, not just wages.
Like the Senate bill, the Obama plan would create competitive insurance markets in each state for small businesses and people buying their own coverage. But it would strip out special Medicaid deals the Senate bill granted to certain states, including Louisiana and Nebraska, that have drawn public scorn. It also would gradually close the Medicare prescription coverage gap, make newly available coverage for working families more affordable. Those changes move in the direction of the House bill.
Estimated to cost about $1 trillion over 10 years, Obama’s plan would be paid for by a mix of Medicare cuts, tax increases and new fees on health care industries.
Oversight of insurance companies has traditionally been a state responsibility. Obama’s proposal for a new federal role calls for setting up a seven-member Health Insurance Rate Authority to monitor insurance industry practices and issue an annual report. States that beef up their consumer protection programs would be eligible for a share of $250 million in federal grants.
House Majority Whip James Clyburn, D-S.C., declined to say that House leaders have the votes now to pass the new plan, but said some of the concerns of House members were addressed by the changes Obama is proposing.
“So I do believe that there is more fertile soil today than when we first took this up,” Clyburn said.
Democrats, who now hold 255 of the House’s 435 seats, drew only one GOP ally when the House passed its health care bill, 220-215, last November. Since then, one Democrat who voted for the bill has resigned, one has died and a third plans to leave office Feb. 28.
Susan Lindner not only knows the names of all 530 elementary students at the school where she works, she can recite all the parents’ names and knows what most of them do for a living.
But it doesn’t stop there for the secretary at Spencer Loomis school in Hawthorn Woods.
The Lake Zurich resident recalls the names of just about every student who has walked through the hallways during her 17-year career working in the front office. She spent 10 years at May Whitney before Spencer Loomis was built.
“I’ve always had a thing for names,” said Lindner, who staffs the front office, greeting everyone who comes into the school.
Her recollection recently shocked a new student teacher who reported to the office for his first day of work. Lindner looked up to greet the 22-year-old visitor. “I knew who he was right away. He was a new student at May Whitney in fourth grade,” Lindner said.
Student teacher Dayne Cunard was stunned that she remembered him more than 12 years later. “She recognized me immediately and remembered everything about me,” Cunard said with a laugh, adding that she even remembered where he had come from when he was a new student at the elementary school all those years ago.
When students come back to the school to visit, Lindner calls them by name. “I remember them all. It’s kind of crazy,” she says with a sincere smile. Lindner, who raised her three children in Lake Zurich, has developed a reputation for her keen memory, which she says is not photographic.
“She remembers everyone,” said Marsha Smyser, administrative assistant to the superintendent of District 95. “Her ability adds to the atmosphere in the building,” Smyser added.
Parents agree.
“It is truly amazing,” said Lake Zurich mom Dina Wohler, saying Lindner greets everyone who walks into the office by first name and always has “a big, happy smile on her face.”
“She’s gifted,” she added.
In addition to making parents and students feel welcome, Lindner’s memory helps out Principal Grant Seaholm when he has to contact families about a school situation.
“It’s a huge asset to the school,” Seaholm said.
Lindner, who worked in sales for Allstate for 19 years before joining the school district, ponders whether the trait is inherited.
Her mother has the same powers of recall. And Lindner says her son, Matt, has the best memory of the trio. He goes beyond names to sports knowledge, recalling every score, statistic, player trade and team record.
Lindner credits her sharp memory to playing countless hours of board games. She said, “We were big game players growing up.”
After spending years campaigning for the construction of a high-end golf course at the Fort Sheridan Forest Preserve, one of the concept’s most prominent proponents now is open to other concepts.
As long as some sort of golf course is included, Town of Fort Sheridan homeowner association president Ralph Pfaff said he’ll consider different options for the preserve, which overlooks Lake Michigan near Highland Park.
“(We) would consider a nine-hole course as part of the solution,” Pfaff said.
But Pfaff still insists the forest district can build a full-sized, top-shelf course for less than the $25 million officials have said it would cost.
“If they really want to do it, they could do it for a whole lot less than (that),” Pfaff said.
Pfaff is among the members of an advisory committee debating whether to build a new golf course at the Fort Sheridan Forest Preserve.
The group has met twice, in December and then earlier this month. The first meeting was so contentious, members brought in an independent mediator to run the second session.
That helped keep the discussion moving in the right direction, said forest board and advisory committee member Carol Calabresa. The goal, Calabresa said, is consensus.
“We have to be optimistic, we really do,” the Libertyville Republican said.
When the forest district acquired the 259-acre preserve from the Army in the 1990s, it agree to keep a golf course there forever.
The district tore up an 18-hole course in 2003 to make way for a new one, but the work halted in 2004 after updated cost estimates came in much higher than originally proposed.
Since then, the economy tanked and the golf business has suffered. Those and other factors have led some forest district officials, including board President Bonnie Thomson Carter, to say building a new 18-hole course would be a costly mistake.
Despite the work stoppage, the master plan never was amended. Other amenities, including trails and a military-themed lookout, have been added despite the golf-related delays.
The advisory committee, which formed last year, is the district’s latest effort to finally resolve the matter.
Four forest district commissioners – Calabresa, Anne Flanigan Bassi of Highland Park, Michelle Feldman of Deerfield and Susan Loving Gravenhorst of Lake Bluff – serve on the panel. So do Pfaff and representatives from the cities of Highwood, Lake Forest and Highland Park.
The Highland Park and Lake Bluff park districts are represented, too.
At the group’s first meeting in December, four options for the site surfaced:
• An 18-hole course, similar to the 2003 proposal.
• A mixed plan that could have a nine-hole course and traditional forest preserve amenities.
•A traditional forest preserve without golf.
•A site that would stay largely undeveloped for at least three years, which would allow officials to reassess the situation based on future economic and market factors.
Those concepts were essentially tossed out during the second meeting when the mediator suggested members recommend new ideas, Pfaff and Calabresa said.
To succeed, the members must work toward a compromise, Calabresa said.
“We all felt there was a huge gap between what is achievable and what the master plan initially showed,” she said. “We want them to understand the financial constraints.”
Pfaff isn’t ready to call the original plan dead, but he knows most forest board members oppose designing and building a high-end course.
The Fort Sheridan homeowners, however, still want to be able to golf at the scenic preserve. That’s why Pfaff’s willing to compromise.
A nine-hole course, he said, could meet the requirements of the district’s deal with the Army. A miniature golf course, which some people have joked about, wouldn’t be acceptable, Pfaff said.
If the advisory group eventually decides golf isn’t in Fort Sheridan’s future, it will make recommendations for a new master plan with alternative public amenities.
The advisory committee is next scheduled to meet April 14 at the Gorton Community Center in Lake Forest.
A winter weather advisory that was expected to be in effect until noon is about to be canceled by the National Weather Service.
The system, which blew through Sunday and into this morning, dumped between 3 and 4 inches across the Chicago area, meteorologists said.
Andy Boxell, a National Weather Service meteorologist, said 3.2 inches hit the ground overnight at O’Hare International Airport. He said DuPage, Kane and western Cook counties had slightly more than that amount, and that Lake and eastern Cook counties had slightly less.
However, he said, this latest snowfall was a wet and slushy snow and rain mix that is heavier than normal snow.
“The accumulation amounts were not as high as we expected,” Boxell said. “But, it’s a wet, heavy snow that causes problems.”
Due to the weather, Metra has a couple of delays on their train lines. Train 330, scheduled to depart Kenosha at 7:51 a.m. and arrive Chicago at 9:15 a.m. on the Union Pacific North Line, is delayed departing Kenosha. Also, train 15 on the Union Pacific West Line, scheduled to arrive Elburn at 7:50 a.m., is operating 15 minutes behind schedule.
O’Hare and Midway are experiencing no flight delays or cancellations, the Chicago Department of Aviation said this morning. However, people should check their airline Web sites in case of a delay.
ComEd officials said 3,600 people experienced power loss during the height of the winter storm Sunday night, with about 3,400 in Chicago.
ComEd spokesman Jeff Burdick added about 800 customers lost power during the peak times in Lake County and northwest suburban Cook County.
Among those losing power was the Daily Herald Printing Center in Schaumburg, where an electrical problem caused by an outage due to the winter storm created a delay in printing the paper Sunday night.
That outage will result in a delivery delay Monday morning. Officials said deliveries will be made throughout the morning and into the afternoon.
For the rare Vodafone HTC HD2 customers who have been waiting to be supported by the company, a ROM update has finally come available.
Build 1.66 can now be downloaded from HTC, which is equal to the public version available for download from HTC, but of course much behind the leaked 2.10 versions floating around at the moment.
At present it is not known adds anything beyond the stock HTC ROM, except the reassurance of not losing your warranty of course.
After a little like earlier this weekend, Audi has dropped official images and details on the 2011 RS5. Let’s get right to the details you’re all looking forward to.
Power for the 2011 Audi RS5, which is developed by the company’s quattro GmbH department, comes from a 4.2L naturally aspirated V8 making 450-hp and a maximum torque of 317 lb-ft. Mated to a standard 7-speed S tronic, the RS5 goes from 0-62 mph in 4.6 seconds with a top speed of 155 mph (electronically governed). Audi says that the 2011 RS5’s fuel-economy is estimated at a combined 22 mpg.
Sales of the Audi RS5 will begin this spring in Europe with prices starting at approximately 77,700 euros ($104,633 USD). There is no information regarding U.S. availability of the RS5 at this time, so we’ll let you know as soon as we hear something.
Hit the jump for the press release and the high-res image gallery.
2011 Audi RS5:
Press Release:
Audi to present the RS 5 in Geneva
* Coupé with 331 kW (450 PS) high-revving V8 engine
* RS 5 also efficient – 10.8 liters per 100 km (21.78 US mpg)
* Newly-developed center differential for quattro drivetrain
Unbridled power lurking in a classically elegant coupé: the Audi RS 5 will debut at the Geneva Auto Show. The high-revving 4.2-liter V8 with its 331 kW (450 hp) unleashes powerful performance while achieving remarkable fuel economy. The seven-speed S tronic and an innovative center differential in the quattro drivetrain transmit power to all four wheels.
Developed by quattro GmbH, the RS models comprise the dynamic spearhead of Audi‘s model range. The RS 5 is the latest torchbearer in a tradition dating back over 15 years to the RS 2 Avant: superior handling in the mid-size class.
A close relative of the V10 which powers the high-performance R8 sports car, the high-revving V8 engine delivers its output from a displacement of 4,163 cm3. Like nearly every Audi gasoline engine, this one also operates via direct fuel injection known by the abbreviation FSI. This same technology has propelled the Audi R8 racing car to four triumphs at the classic endurance race in Le Mans. The common-rail system generates up to 120 bars of pressure.
Intensive fine-tuning of the dual-branch intake and exhaust system allows the undersquare engine to breathe freely; four adjustable camshafts and tumble flaps in the intake manifold facilitate mixture formation. The 4.2 FSI provides imposing torque and is right at home even at high revs – almost like a race engine. The engine delivers 331 kW (450 hp) at 8,250 rpm and – between 4,000 and 6,000 rpm – transmits a maximum of 430 Nm (317.15 lb-ft) of torque.
The vigorous strength, the spontaneous responsiveness, the joyful high-revving, and the throaty, sonorous music: this V8 produced by hand at Audi stunningly combines the essence of power and emotion. The 4.2 FSI propels the coupé’s 1,725 kilograms (3,802.97 pounds) in 4.6 seconds from 0 to 100 km/h (0 to 62.14 mph) to an electronically governed top speed of 250 km/h (155.34 mph). Audi can increase that to 280 km/h (173.98 mph) upon request.
Impressive efficiency: just 10.8 liters of fuel per 100 km
Efficiency is standard in every Audi; the RS 5 is no exception. The ultra-powerful eight-cylinder engine averages 10.8 liters of fuel per 100 kilometers (21.78 miles US mpg) – far less than its main competitors. This impressive figure is due in part to the technologies from the Audi modular efficiency platform. The engine and the entire drivetrain have been optimized to minimize friction, the oil pump operates on demand, and an energy-recovery system conserves energy during coasting and braking.
The standard seven-speed S tronic in the RS 5 – with its high efficiency ratio and its high-geared top speed – also enhances efficiency. It consists of two clutches and two subsidiary transmissions. Both subsidiary transmissions are continuously active, but only one is powered at any given time by the engine. Gears are alternately shifted by the two clutches – at lightning speed, smoothly, and almost imperceptibly.
The seven-speed S tronic, which was specially reinforced to accommodate the high-revving V8, can operate in fully automatic mode – or the driver can shift via the innovative selector lever or shift paddles on the steering wheel. By means of the standard Audi drive select, the driver can switch in automatic mode among three different options: auto, comfort, and dynamic. In the launch control program, the seven-speed S tronic ensures flawless acceleration from a standstill – at full power and with minimal tire slip.
New quattro technology: the crown-gear differential
Like all RS models, the RS 5 also applies its power to the road with quattro permanent all-wheel drive. As for the center differential, which regulates power distribution between the front and rear axles, Audi – the leading all-wheel-drive brand – unveils the next generation: a crown-gear differential.
The self-locking crown-gear center differential is compact and lightweight – and attains a high efficiency ratio.
Thanks to its package of plates, the differential can widely vary the distribution of torque between the front and rear axles. If necessary, up to 70 percent can flow to the front or as much as 85 percent toward the tail end. The 40:60 ratio of the standard rear-biased configuration ensures sporty handling.
This new differential operates in conjunction with electronic torque vectoring, which affects all four wheels. If one of the inside wheels becomes imbalanced while the vehicle is at its operational limits, then the system slightly decelerates the wheel to obviate wheel spin. This results in terrific traction on the one hand while generating a yaw moment which aids cornering.
As a perfect complement to the new quattro drivetrain, Audi can optionally position the sport differential at the rear axle. It actively distributes torque between the rear wheels in order to further boost stability and grip at the vehicle’s limits of handling. The electronic management of the RS 5 sport differential was designed to be uncompromisingly dynamic.
With regard to the springs, shock absorbers, elastokinematics, and the anti-roll bars, the RS 5 chassis exhibits a sporty configuration and renders the body 20 millimeters (0.79 inches) lower than that of the Audi A5. The 19-inch alloy wheels fitted with 265/35 tires are standard. They are executed in an exclusive 5-arm structure design. The RS 5 optionally comes with 20-inch wheels and 275/30 tires. Winter wheels featuring the same dimensions are available; the 19-inch wheel is suitable for snow chains.
The brake system employs powerful and internally ventilated discs, which measure 365 millimeters (14.37 inches) in diameter at the front axle. In order to maximize the dissipation of heat, the steel friction rings are perforated and connected by pins to the aluminum brake discs. The high-gloss black brake calipers bearing RS logos are likewise made of aluminum; the front calipers are fitted with eight pistons each. Audi can optionally fit the front axle with ceramic carbon-fiber brake discs measuring 380 millimeters (14.96 inches) in diameter. They are extremely lightweight, strong, and durable. The electronic stabilization program (ESP) integrates a sport mode and can be switched off entirely.
Even more dynamics: Audi drive select
The speed-dependent servotronic steering in the RS 5 is especially taut. The standard Audi drive select (a vehicle-dynamics control system) allows the driver to switch among three modes of operation – comfort, auto, and dynamic – to adjust steering, the seven-speed S tronic, the sport differential, the engine, and the exhaust system. And if the car is equipped with the MMI navigation system, a fourth mode allows the driver to customize their own profile.
As regards the engine, Audi drive select controls the exhaust system’s two throttle valves and the sound flaps; when they open, the rich sound becomes even more resonant. Along with the sport differential, dynamic steering is another optional component of Audi drive select. Dynamic steering adjusts the steering ratio to a vehicle’s speed – directly for maneuvering at low speeds and indirectly for traveling at highway speeds. At the vehicle’s cornering limits, it automatically ensures smooth handling via minor corrective actions.
The RS 5 exudes an athletic and powerful identity; its classically beautiful coupé styling dazzles with new and clear-cut accents. Its single-frame grille bears a shiny charcoal-gray rhombus-pattern grid. Xenon plus headlights boasting a sweeping strip of LED daytime running lights are standard. The oversized air inlets for the engine, front brakes, and the radiators are bordered by striking contours. The newly designed bumper tapers downward into a splitter.
The flared fenders with the crisp horizontal upper edges are reminiscent of a classic Audi: namely, the all-wheel-drive pioneer Audi quattro, which itself debuted at the Geneva Auto Show 30 years ago. The side sills bear angular caps; the trim strips on the single-frame grille and near the side windows as well as the outside mirrors’ covers feature a matt aluminum look. Eight different paint finishes are available.
The tail end is dominated by two oval exhaust pipes integrated within the bumper. A large diffuser protrudes prominently upward. The spoiler in the tailgate automatically extends at a speed of 120 km/h (74.56 mph) and retracts at 80 km/h (49.71 mph).
The extensively clad underbody of the RS 5 integrates air vents for the seven-speed S tronic and the front brakes. At highway speeds, the aerodynamic characteristics of the RS 5 generate downforce to further enhance stability.
Dynamic elegance: the interior
The vehicle’s dynamically elegant styling extends to the interior. Sports seats with pronounced side sections and integrated head restraints are standard. They are electrically adjustable and feature a leather/Alcantara combination. Alternatives include bucket seats with more prominent contours and folding backrests or ventilated and luxuriously upholstered climate-controlled comfort seats.
The steering wheel has a substantial rim and is covered with perforated leather. The instruments have black gauges and white lettering with distinctive scaling. When the ignition is switched on, the red needles briefly rise high and then drop back down. The driver information system integrates a lap timer for recording circuit times and an oil-temperature gauge. Just like the optional MMI navigation systems’ monitor, it displays an RS greeting upon ignition.
The interior is black and the decorative inlays are made of carbon fiber. A fascia in the instrument panel features a piano finish. The pedals, the footrests, and the optional MMI navigation systems’ control buttons gleam thanks to their aluminum look. Moreover, the door handles consist of two slim strips – typical of Audi RS models. Aluminum inserts adorn the door sill trims and RS 5 logos lend dynamic highlights to the interior.
Upon request, truly exclusive features such as decorative inlays with a dark, stainless-steel mesh look, a black piano finish or brushed aluminum are available. Or seat upholstery featuring special leathers and colors as well as silver headlining. In addition, the Audi exclusive RS program offers options such as suede-covered controls and floor mats bearing RS 5 logos.
A Carbon design package is available for the engine compartment and, for the vehicle body, there are styling packages in black or matt aluminum look. And the acoustically bold Sport exhaust system – also with a sound flap – has black tailpipe trims.
Sales of the Audi RS 5 will begin in the spring. Its basic price will be approximately 77,700 euros.
Right now, H&R Block (HRB) is watching its stock plummet after Oppenheimer downgraded it to “Perform” from “Outperform.” Shares are currently at $20.18 a share, down 4.5% or $0.94.
The firm downgraded the company based partly on “uninspiring” channel checks and disappointing commentary from Inuit (INTU). The firm removed its target on H&R Block, according to The Fly On The Wall.
Factory Five Racing Type 65 Coupe – Click above for image gallery
The conflicts between Carroll Shelby and various kit car makers are well known and sometimes seem never-ending. Massachusetts-based Factory Five Racing has been at the forefront of the lawsuits with Shelby, and the two have been in battling it out in the courtroom for a decade. The initial lawsuit, filed in the year 2000, resulted in a settlement that barred Factory Five from using the terms “Cobra, 427 S/C, Shelby, Shelby Cobra, Daytona Coupe and Daytona Coupe Cobra” on any of their products.
The two parties were at peace for eight years until Shelby filed another lawsuit in December of 2008 alleging that Factory Five’s Type 65 Coupe (pictured above) bore “designs confusingly similar to the Daytona Coupe Trade Dress” and that FFR used the term “Cobra” in the metatags of its website to promote its product.
This past week, a U.S. District Court ruled in Factory Five’s favor, allowing the company to continue to produce the Type 65 Coupe. The reason for the decision, according to the 25-page court document, is based on the settlement from the prior lawsuit. The original case stated that “Shelby dismisses with prejudice all claims that have been asserted or could have been asserted relative to the trade dress or designs of FFR’s kits, including but not limited to the kits known as the 427 Roadster and the Type 65 Coupe.” Essentially, the courts ruled that Shelby couldn’t sue Factory Five for something it had already agreed upon. In addition, if Shelby believed that FFR was in violation of the terms and conditions of the agreement, it was to first give written notice to FFR of the alleged violation prior to any judicial enforcement, which it did not.
In response to the decision, Factory Five president David Smith wrote a scathing statement regarding Shelby, claiming that “Shelby’s legal bullying has caused Factory Five to endure years of hardship and expend over $1 million in legal fees to defend against what many in the general public believed to be frivolous in nature.” He went on to say that Carroll Shelby is “a man whose lasting legacy is rapidly changing from racing legend to prolific litigant.” You can read Factory Five’s full press release regarding the lawsuit after the jump.
On the whole, Rebellion Developments is pretty happy with the reaction to Aliens vs Predator. Despite some less than favorable reviews, the game became the fastest-selling title so far this year in the UK. This has prompted the studio
Refresher: Power for the Lexus LFA comes from a 4.8L V10 engine that makes 552-hp with a maximum torque of 354 lb-ft. Mated to a 6-speed Automated Sequential Gearbox, the LFA goes from 0-60 mph time of just 3.5 with a top speed of 202 mph.
Equities are sluggish today with relatively low volume. Nevertheless, the Dow is down 18 points to 10,384, the NASDAQ down 5 points to 2239 and the S&P 500 down 2 points to 1107.
Oil has broke even and remains at $79.80 a barrel. Energy futures are down.
Gold has begun to fall and is currently resting at $1114 an ounce, down $8.10. Silver is down $0.24 or 1.5% to $16.20 an ounce.
The S&P 500’s biggest gainer is Smith International Inc. (SII), which is up 7.75% to $40.62 a share. The biggest loser is currently H&R Block Inc. (HRB), down 4.78% to $20.11 a share.
Futures remain mixed, with equities and soft goods taking the biggest hits.
2K Games announced today plans for “aggressive” post-launch support for BioShock 2. Kicking things off in March will be the Sinclair Solutions Test Pack. Details past the jump.
Now, thanks to a long-awaited law that goes into effect Monday, you’ll know that if you pay the minimum on a $3,000 balance with a 14 percent interest rate, it could take you 10 years to pay off.
“Jaws will drop,” said David Robertson, publisher of The Nilson Report, a newsletter that tracks the industry. “I don’t doubt for a nanosecond that it’s going to give a lot of people a sinking feeling in their stomachs.”
That’s not all that will make them queasy.
During the past nine months, credit card companies jacked up interest rates, created new fees and cut credit lines. They also closed down millions of accounts. So a law hailed as the most sweeping piece of consumer legislation in decades has helped make it more difficult for millions of Americans to get credit, and made that credit more expensive.
It wasn’t supposed to be this way. The law that President Barack Obama signed last May shields card users from sudden interest rate hikes, excessive fees and other gimmicks that card companies have used to drive up profits. Consumers will save at least $10 billion a year from curbs on interest rate increases alone, according to the Pew Charitable Trust, which tracks credit card issues.
But there was a catch. Card companies had nine months to prepare while certain rules were clarified by the Federal Reserve. They used that time to take actions that ended up hurting the same customers who were supposed to be helped.
Consumer advocates say the law still offers important protections for the users of some 1.4 billion credit cards.
“We expected some rate increases; we expected some annual fees,” said Ed Mierzwinski of the U.S. Public Interest Research Group, an advocacy organization that lobbied for the law.
To be sure, the law takes effect while credit card companies are still reeling from the recession.
In 2007, the top 12 card issuers earned a combined $19 billion from credit cards, according to The Nilson Report. A year later, amid the financial meltdown, profits for those companies fell more than 65 percent to $6.32 billion. The plunge was largely because defaults ballooned as unemployment soared.
Profit figures for 2009 aren’t yet available. But banks wrote off about $35 billion in credit card debt last year, as the unemployment rate topped 10 percent. Analysts predict the default rate will remain at least twice as high as normal through this year, and longer if unemployment stays high.
At the same time, the law is expected to cut into future profits. FICO Inc., the company best known for its credit scores, projects the average card will generate less than $100 a month in revenue within three years, down from $200 a month before the law.
That helps explain why the industry reacted so aggressively to the legislation. Among the moves it made:
— Resurrected annual fees.
Annual fees, common until about 10 years ago, have made a comeback. During the final three months of last year, 43 percent of new offers for credit cards contained annual fees, versus 25 percent in the same period a year earlier, according to Mintel International, which tracks marketing data. Several banks also added these fees to existing accounts. One example: Many Citigroup customers will start paying a $60 annual fee on April 1.
— Created new fees and raised old ones.
These include a $1 processing fee for paper statements for cards issued by stores such as Victoria’s Secret and Ann Taylor. Another example is a $19 inactivity fee Fifth Third Bank now charges customers who haven’t used their card for six months.
Other banks increased existing fees. JPMorgan Chase, for instance raised the cost of balance transfers from one card to another to 5 percent of the transfer from 3 percent.
— Raised interest rates.
The average rate offered for a new card climbed to 13.6 percent last week, from 10.7 percent during the same week a year ago — meaning cardholders had to pay almost 30 percent more in interest, according to Bankrate.com.
For millions of other accounts, variable interest rates that can rise with the market replaced fixed rates. The Fed is expected to start raising its benchmark interest rates later this year, which would likely trigger an increase on those cards.
Besides making credit more expensive, banks also made it harder to get and keep credit cards. One big reason: Since the financial meltdown, many credit card issuers have been trying to reduce risk.
The number of Visa, MasterCard and American Express cards in circulation dropped 15 percent in 2009, for example. Rarely used cards were among the first cut off. Some cards linked to rewards programs for purchases like gasoline were likewise shut down.
Card companies also slashed credit limits for millions of accounts that remain open. About 40 percent of banks cut credit lines on existing accounts, according to the consultant TowerGroup, which estimated that such moves eliminated about $1 trillion in available credit. Much of that was unused.
Credit lines were frequently cut in regions most affected by the housing crisis and high unemployment, such as Florida and California, said Curt Beaudouin, a senior analyst at Moody’s Investors Service. “They’re not doing it willy nilly, they’re doing it systematically,” he said.
Companies are also making fewer solicitations. Mailed offers for new cards increased in the final three months of 2009 for the first time in two years, but there were only about 575 million. That’s about a third of the average number of quarterly offers from 2000 through 2008, according to Mintel.
Because the law makes credit cards less profitable, some subprime borrowers may not be able to get cards at all, at least for the next few years. There’s no fixed definition, but subprime borrowers generally have a FICO score below 660. For a good portion of this group, options may be limited to alternatives like PayPal and other electronic payment services, prepaid cards and payday lenders.
“Not everyone either deserves or should have an open-ended credit card,” said Roger C. Hochschild, chief operating officer of Discover Financial Services.
Joining those who won’t easily get cards: college students and others under age 21. The law strictly limits card marketing on campuses, ending giveaways like T-shirts and pizza Cards can only be granted to applicants who show they have the means to repay, or those who have a co-signer who can pay.
“Some of the more vulnerable parts of the population are a little bit more protected,” said Georgetown University finance professor James Angel. But he predicts card companies will find ways around most of the new restrictions. And once the economy recovers, he expects the lending spigot to open again.
In the meantime, there is one group of consumers that banks will chase after — those who carry a balance from month to month for at least part of the year, and pay their bills on time. They’re the most profitable and least risky group for banks.
Also a target customer: anyone willing to do more business with the bank that issues their card, say opening a checking or savings account or taking out a mortgage.
“What we want is a deeper relationship with our customers,” said Andy Rowe, an executive vice president with Bank of America’s card business. Customers willing to stick with a single bank may even be able to get annual fees waived or get a better interest rate, he said. “That’s where the competition will be.”
Power shortages continue to ravage Venezuela due to depleted output from drought-starved hydroelectric facilities that provide 70% of the nation’s power.
Black outs and brown outs are an increasingly serious threat to an already weakened Venezuelan economy, since with power shortages come reduced operating hours for factories, offices, and stores. Less output means economic contraction, pure and simple.
According to the opposition, more than a dozen thermoelectric power plants have been delayed over the years due to mismanagement. Meanwhile, Hugo Chavez is accusing the bourgeois of electricity sabotage.
Mr Chavez said authorities must be “on the alert” and apprehend anyone who cuts electricity cables connected to the grid.
Such sabotage has caused power failures in some regions and exacerbated the effects of severe energy shortages, he claimed.
“Be on the lookout. Patrols must be carried out to capture the saboteurs because those responsible must be caught and put in prison,” Mr Chavez said during his weekly television and radio programme.
Referring to his government’s adversaries, he said: “They think that’s how they’re going to topple Chavez and that’s what they’re seeking, but if there’s an electricity collapse, it won’t be Chavez who is going to fall. Prepare yourselves, bourgeois folks, because it will be you who will fall.” who is going to fall. Prepare yourselves, bourgeois folks, because it will be you who will fall.
Someone’s soon down for the count, we’re just not sure yet whether it is Hugo Chavez or Venezuela.
Congressman Ron Paul is scheduled to appear on CNN’s Larry King Live tonight at around 9:45 pm ET. This will be the 10th time over the past year that Ron Paul is participating in the show. Check out his previous appearances here.
Overnight snow totals were 5 to 6 inches throughout Peoria County, with even higher totals reported to the west by Monday morning.
“As we move outside Peoria, west into Knox County, we’ve had totals in that area between 6 and 8 inches,” Chris Miller, a meteorologist for the National Weather Service in Lincoln, said Monday morning. “The maximum amounts were around Abingdon and Galesburg, where they were between 7 and 8 inches.”
Parts of Stark County received more than 5 inches. Fulton (3 to 6 inches) and Marshall (3 to 5) counties saw much more snow than Mason (1 to 2 inches).
As anticipated, the heaviest snow fell along the Illinois River and to the west. Tazewell County reports showed snow at 1½ to 4 inches, and Woodford County saw accumulation of 3 to 5½ inches.
“There’s a pretty sharp line of where the rain changed to snow, from the southern part of Fulton County across northern Mason County, and the Tazewell-Logan county line,” Miller said. “The eastern extent of the snow was right around Bloomington, which had three-tenths of an inch. It was pretty much confined to the Tri-County Area and west and northwest.”
Miller said snow flurries are expected to continue Monday through Wednesday, with no notable accumulation projected.
Temperatures are projected to fall from recent highs in the 30s to highs in the 20s and single-digit lows from Wednesday into the weekend.
By Sunday, temperatures will climb back to highs in the 40s, Miller said.
ELGIN, Ill. (STMW) — The first sign police had that someone had robbed a northwest suburban bank branch Friday was when an officer driving past noticed a pile of smoking currency in the street.
The lone man who had robbed the Chase Bank at 24 E. Chicago St. in Elgin at 2:08 p.m. apparently threw down the money when a dye pack hidden inside exploded in his hand.
Police later arrested Michael Broome, 35, who the officer said is believed to be homeless.
Deputy Police Chief Jeff Swoboda said Friday that the suspect was arrested about an hour after the robbery in the area of State and National streets.
The robber entered the bank, presented a note and told employees he had a gun, FBI spokeswoman Cynthia Yates said.
He demanded money and fled with an undisclosed amount.
The man had not been charged as of 9 a.m. Monday, Yates said.
He was arrested after an Elgin police officer saw noticed he matched the description of the robber.
Has the honeymoon glow for your job long since gone – and you’re now having a hard time getting psyched to go to work each day?
If so, here are some PSYCHE-OLOGY TECHNIQUES to fall back in love with your career!
(1) Each day leave your desk when you’re excited and cocky about what you’re working on — so the next morning you’ll be excited to return and cocky in how you start your day.
(2) Get trigger happy. Surround yourself with all your awards and photos of successful, happy moments — which trigger confidence and added zest to work.
(3) Link your success to something else…like baby needs a new pair of shoes…or mommy needs a new pair of Pradas. Bribe yourself to success!
(4) Play with people better than you. In every career there are “SUPERMODELERS.” Go get caffienated with one. Hearing their tales of glory will reingnite your passion..and maybe they’ll offer tips on how to better wag a tale or two yourself.
(5) Remind yourself WHY you were passionate about your work in your honeymoon period…then ask yourself why your honeymoon waned. Un-wane the wane!
(6) Does your work improve people’s lives? Remind youself how what you do MATTERS!
(7) Increase your passion for what you do by increasing the hyperbole power of the words you associate yourself with. For example, as I a writer would re-psyche myself to work on a project by picking career hyperboles to tell myself like: I am a Kick Butt Author, I am A Sorcerer of Words, I am a Mistress of Semantics!
(8) Recharge your energy with new clothes energy. When you buy something brand new you are ensuring you are not bringing any negative associations into your day due to a subconsious memory of past negative office events associated to what you are wearing. Likewise… you know those “lucky clothes” you think you have? They actually can make you luckier — by making you feel more confident — because they trigger positive associations to success — and get you thinking more confidently. So it’s not superstition that makes lucky clothes luckier for the wearer, but basic common sense psychology.
