The New York Timesleads with a look at how banks are reducing the number of loans they give out to businesses. Over the last year, two key credit sources for companies have collectively declined 3 percent, which “is the largest annual decline since the credit tightening that began with the last recession, in 2001.” USA Todayleads with word that the White House has increased its estimate for next year’s deficit to a record $490 billion. A previous estimate for the deficit in the fiscal year beginning on Oct. 1 was $407 billion, but the numbers have been revised to reflect a weakening economy and “larger-than-anticipated costs” of the fiscal stimulus package.
The Los Angeles Timesleads with a look at the “rickety calm” that has engulfed Iraq as the last of the “surge” troops leave the country and citizens wait to see what happens next. Even as they’re getting used to living with much less violence, Iraqis “tread carefully” out of a generalized fear that gains could quickly unravel. The Wall Street Journal plays weekend catch-up and leads its world-wide newsbox with Saturday’s bombings in India, which killed more than 45 people. A group calling itself the “Indian Mujahadeen” claimed responsibility for the explosions. The Washington Postleads locally but goes high with the efforts by Barack Obama’s campaign to increase registration and turnout among African-Americans. Black voters could be the key to an Obama victory in several battleground states, including some in the South. But the campaign has a steep hill to climb, and there’s uncertainty about whether spending so much time and effort on reaching citizens who have long tuned out of politics will actually pay off in November.
The examples cited by the NYT to illustrate the way credit has tightened for companies make it clear that money is still available, but banks are being more careful about approving loans. Indeed, businesses “with solid credit and profitable businesses can generally still get loans, but rates are higher and wait times are longer,” says the paper. The paper notes that until about a year ago, banks could easily sell most of their loans, which passed the risk on to someone else. But now that banks are risking their own money, they’re more motivated to make sure a borrower can actually afford the credit payments. That doesn’t necessarily sound like a negative development, but some contend that banks have gone from one extreme to the other. Whereas banks used to give almost anyone credit, they now have “an equally arbitrary aversion to lend,” and even profitable companies are having to jump through hoops in order to get credit to expand their businesses.
USAT makes clear that the projection for next year’s deficit is likely to be even higher than the revised projections because the estimate doesn’t take into account the full cost of the wars in Afghanistan and Iraq. Also, if the economy worsens the number is likely to increase further. Despite its record-breaking sum, as a share of the economy, the 2009 deficit would be 3 percent to 4 percent and falls below the post-World War II record of 6 percent that was set in 1983. Still, it’s a sobering reminder of how much the deficit has increased under Bush, who inherited a $128 billion surplus in 2001.
The Post fronts the second story in its series about oil that focuses on China, a country that “accounts for about 40 percent of the world’s recent increase in demand for oil.” Whereas private cars in China were a rare sight 15 years ago, there were 15.2 million of them last year. That number has plenty of room to grow as fewer than 4 percent of people in China have actually bought a car. Even as demand skyrockets, China, along with other developing countries, heavily subsidizes oil so there’s little incentive to conserve fuel. The NYT also takes a look at subsidies around the world and notes that, according to one estimate, countries with fuel subsidies “accounted for 96 percent of the world’s increase in oil use last year.”
The NYT fronts a look at John McCain’s 15-year leadership of the International Republican Institute, a role that has brought him into close contact with many of Washington’s most powerful lobbyists. The group’s mission of promoting democracy around the world is certainly consistent with McCain’s stated values, but a closer examination “reveals an organization in many ways at odds with the political outsider image that has become a touchstone” of his campaign for the White House. McCain has helped the institute raise millions of dollars from lobbyists and companies who have interests before the Senate. And lobbyists have also been an integral part of the institute, as 14 of them served on the group’s board during McCain’s tenure.
The NYT and WP both note that the Senate will devote much of its time this week to considering a huge omnibus package that contains 35 bills. The brainchild of Majority Leader Harry Reid is officially known as the Advancing America’s Priorities Act, but the NYT calls it the “Tomnibus” since it’s devoted to thwarting the efforts of one man, Sen. Tom Coburn, R-Okla. Coburn, known as the Senate’s “Dr. No,” is an expert at using parliamentary tactics to block the passage of legislation. Much of the legislation in the $10-billion package has overwhelming bipartisan support, but Coburn says it involves unnecessary government spending.
There’s such poor oversight of contractors in Iraq that one company got paid for work it never completed, notes the WP. The special inspector general for Iraq reconstruction says Parsons received $142 million of a total $333 million, even though it completed only about one-third of the projects stipulated in one of its contracts. Parsons questions the findings and says its work was hindered by the violence in Iraq. A separate Post story points out that the government has apparently decided that its experience with contractors in Iraq has been so successful that it’s expanding efforts to award new contracts for work in Afghanistan.
The NYT points out that the phrase “jump the shark,” which is used to denote things that are perceived “as being past their prime,” could be on its way out and replaced by a new expression: “nuked the fridge.” The original phrase refers to an episode of Happy Days in which a character jumped over a shark while water skiing; the new version was inspired by the latest Indiana Jones movie, in which the rogue archaeologist survives a nuclear blast by hiding inside a fridge. Jason Nicholl, who runs a Web site dedicated to the new phrase, characterized it as a “new, fresh take” on an old expression that probably doesn’t mean much to many of those who use it. ” ‘Jump the shark’ is for people over the age of 60, who remember the show.”