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'Historic' budget cuts roughly equal to 2008 payroll growth

The San Diego Union-Tribune found that "San Diego's payroll ballooned by $41 million last year, fueled by unpublicized payouts, labor settlements and costly benefits."  Analysis of spending data  "helps put into perspective the $43 million in wage and benefit reductions that will take effect July 1 to address a budget gap. [Mayor Jerry] Sanders portrays the 6 percent reductions as historic and difficult, yet the savings are about the same as last year's growth in payroll." The story is the first in a three-part series that also includes an online payroll database.

Renae Merle of The Washington Post reports that a backlog of delinquent mortgages threatens the nation's economic recovery. "It masks the full extent of the foreclosure crisis and threatens to depress prices even further just as some parts of the country are hinting at recovery. For lenders, it could portend even more financial losses tied to the mortgage meltdown." Economists say economic recovery is dependent on the stabilization of the housing market.

A five-part series in The News & Observer (Raleigh, N.C.) put the spotlight on costly state policy decisions. Stories addressed wide-ranging topics: the high cost of enforcing the state's mandatory sentencing law for low-level felons; lack of generic drug requirements for Medicaid patients; pet projects and untracked spending; corporate tax loopholes; and the hidden cost of benefits policies for state employees.

The Morning Call in Allentown, Pa., published “Risky Business,” a four-part series on the Bethlehem Area School District’s costly use of variable-rate bonds and swaps to finance hundreds of millions of dollars in school renovations. "While the board approved swap after swap on the advice of the administration and former financial consultant Les Bear, no one in the district apparently was keeping track of the deals' costs that tied 75 percent of the district's total construction debt -- $278 million -- into risky variable interest rates."

"Commercial real-estate loans could generate losses of $100 billion by the end of next year at more than 900 small and midsize U.S. banks if the economy's woes deepen, according to an analysis by The Wall Street Journal."  Maurice Tamman and David Enrich report that losses on commercial real-estate loans are much greater than loses related to home loans.  Their analysis reveals that stress on the banking system extends well beyond the largest financial institutions.  An interactive graphic shows how the small and midsized banks fared under the same "stress tests" the federal government used for the nation's largest banks.

"An analysis by The Associated Press, based on data collected by the U.S. Postal Service and the Housing and Urban Development Department, shows the emptiest neighborhoods are clustered in places hit hard during the recession of the 1980s — cities such as Flint, Mich.; Columbus, Ohio; Buffalo, N.Y.; and Indianapolis." Dan Sewell and Frank Bass report that while foreclosure stories have focused on "mostly middle-class, suburban Sunbelt neighborhoods from California to Florida," urban neighborhoods in the Rust Belt have been hardest hit.  Nearly $6 billion in federal fund have been designated to rehabilitate or demolish abandoned and foreclosed homes in some of the nation's most troubled urban neighborhoods.

A project by the Center for Public Integrity delved into the financial crisis by analyzing 7.2 million subprime loans made from 2005 through 2007. The analysis revealed 25 lenders responsible for nearly $1 trillion in subprime lending during that time. Their reporting uncovered "that at least 21 of the top 25 subprime lenders were directly or indirectly financed by the mega banks that received bailout money — through direct ownership, credit agreements, or huge purchases of loans for securitization." The package includes detailed profiles of "The Subprime 25."

An Associated Press investigation found that many diabetics are reducing or forgoing doctor visits, medications and testing due to financial pressures. Business writer Linda A. Johnson reports that, “People with other health problems also are cutting back on care amid the recession, but diabetics who don't closely monitor and control the chronic disease risk particularly dire complications: amputations, vision loss, stroke — even death.”

Charles Piller of The Sacramento Bee reports that billionaire Warren Buffett's Berkshire Hathaway "owns more than $13 billion of stock in the top recipients of TARP funds – including Goldman Sachs Group Inc., US Bancorp, American Express Co. and Bank of America Corp., all considered by analysts to be in deep trouble before the federal infusion."  Overall, the story notes, "just 28 companies received more than 90 percent of the funds so far disbursed to financial firms by the $700 billion Troubled Asset Relief Program, or TARP."

An analysis of bank financial statements by the Investigative Reporting Workshop at American University and msnbc.com, sheds new light on just how dangerous conditions have become in many banks across the nation. Information is available on the BankTracker site and a related msnbc.com story by Bill Dedman.

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