Category: Money Troubles

The Trump Administration to Restaurants: Take the Tips!

Most Americans assume that when they leave a tip for waiters and bcapital-one-credit-cardartenders, those workers pocket the money. That could become wishful thinking under a Trump administration proposal that would give restaurants and other businesses complete control over the tips earned by their employees.

The Department of Labor recently proposed allowing employers to pool tips and use them as they see fit as long as all of their workers are paid at least the minimum wage, which is $7.25 an hour nationally and higher in some states and cities. Officials argue that this will free restaurants to use some of the tip money to reward lowly dishwashers, line cooks and other workers who toil in the less glamorous quarters and presumably make less than servers who get tips. Using tips to compensate all employees sounds like a worthy cause, but a simple reading of the government’s proposal makes clear that business owners would have no obligation to use the money in this way. They would be free to pocket some or all of that cash, spend it to spiff up the dining room or use it to underwrite $2 margaritas at happy hour. And that’s what makes this proposal so disturbing.

The 3.2 million Americans who work as waiters, waitresses and bartenders include some of the lowest-compensated working people in the country. The median hourly wage for waiters and waitresses was $9.61 an hour last year, according to the Bureau of Labor Statistics. Further, there is a sordid history of restaurant owners who steal tips, and of settlements in which they have agreed to repay workers millions of dollars.

Hitting the debt limit: What bills would be paid?

departures-200-netbank-cs2007WASHINGTON — In the summer of 2011, when a debt crisis like the current one loomed, President Barack Obama warned Republicans that older Americans might not get their Social Security checks unless there was a deal to raise the nation’s borrowing limit. After weeks of brinkmanship, Republicans consented and Obama agreed to a deficit-reduction plan the GOP wanted. Crisis averted, for a time. Now that there’s a fresh showdown, the possibility of Social Security cuts _and more — is back on the table.

The government could run out of cash to pay all its bills in full as early as Feb. 15, according to one authoritative estimate, and congressional Republicans want significant spending cuts in exchange for raising the borrowing limit. Obama, forced to negotiate an increase in 2011, has pledged not to negotiate again.Without an agreement, every option facing his administration would be unprecedented. It would require a degree of financial creativity that could test the law, perhaps even the Constitution.

It could shortchange Social Security recipients and other people, including veteran and the poor, who rely on government programs. It could force the Treasury to contemplate selling government assets, a step considered but rejected in 2011. In short, the Treasury would have to create its own form of triage, creating a priority list of its most crucial obligations, from interest payments to debtors to benefits to vulnerable Americans. “It may be that somewhere down the line someone will challenge what the administration did in that moment, but in the moment, who’s going to stop them?” asked Douglas Holtz-Eakin, a former director of the Congressional Budget Office. “I pray we never have to find out how imaginative they are.”

In such a debt crisis, the president would have to decide what laws he wants to break. Does he breach the borrowing limit without a congressional OK? Does he ignore spending commitments required by law? In a letter to Obama on Friday, Senate Democratic leaders urged him to consider taking any “lawful steps that ensure that America does not break its promises and trigger a global economic crisis — without congressional approval, if necessary.” The White House has resisted that path. It has rejected recommendations that it invoke a provision in the 14th Amendment to the Constitution that states that “the validity of the public debt of the United States … shall not be questioned.” “There are only two options to deal with the debt limit: Congress can pay its bills or they can fail to act and put the nation into default,” White House press secretary Jay Carney said. “Congress needs to do its job.”

So what’s left if Congress does not act in time? Technically, the government hit the debt ceiling at the end of December. Since then, Treasury Secretary Timothy Geithner has halted full payments into the retirement and disability fund for government workers and to the health benefits fund of Postal Service retirees. The Treasury can stop payments to a special fund that purchases or sells foreign currencies to stabilize world financial markets. >>>CONTINUE READING

Fiscal Cliff: Ugh, Recession is Now More Likely

departures-200-netbank-cs2007Here is a simple way to think about the political calculus of Washington’s latest twists and turns. And — unfortunately — it suggests that economic and market dislocations may be needed to get our politicians to cooperate and govern properly. A major issue from day one was the extent to which the lack of trust between our political parties undermined Washington’s ability to govern. Hoping to resolve this problem and thus deliver consensus, party leaders opted in the summer of 2011 for a very big stick: threaten the country with a major economic setback as a way to get the rank and file of both parties to cooperate. This, of course, was the strategic underpinning of the fiscal cliff: By designing large and blunt spending cuts and tax hikes that would automatically go into effect, and thus push the country into a costly recession, political leaders hoped to impose compromise among bickering and dithering politicians — particularly among those with very different views of the past, present and future. The stick succeeded in catalyzing serious negotiations between President Obama and House Speaker Boehner. But the stick was not big enough to overcome differences and force a cooperative outcome. And with Republicans facing the bigger risk of being blamed by the country for the failure, Speaker Boehner opted for his Plan B. Now the situation has taken an even more interesting turn. The Speaker’s inability Thursday to unite Republicans behind his plan highlights the extent to which mutual trust is also seriously lacking WITHIN the political parties — and not just between them. This meaningfully complicates the cooperative solution.

How about the future?

Let us start with the obvious. In order to avoid a recession that would aggravate the country’s unemployment problem and reignite concerns about housing and household finances, Democrats and Republicans need quickly to find a way to work together. While possible, it is hard to see how this happens endogenously. There are lots of divisions, and at many levels. If an internal resolution mechanism is indeed lacking, than cooperation will need to be forced by an outside event. This is where economic and market volatility comes in. Thursday’s collapse of Speaker Boehner’s Plan B unfortunately makes it more likely that the fiscal cliff may materialize, constituting a blow to a recovering US economy. Absent some last minute messy deal that buys a few weeks at best, that would constitute stage one. The question about stage two is how much time do political parties then need to find a solution and avoid a bigger economic and financial implosion. The 2008 experience with TARP — where the market and economic dislocations that followed the initial congressional vote rejection quickly forced politicians to cooperate — suggests that there is nothing like visible turmoil to get our bickering political parties to come together properly in the national interest.

Let us hope that the political system responds in a similar fashion in the coming weeks, if not earlier. There is a lot at stake.

Cross-posted from CNBC.com.

Kill the 401(k)?

As America hurtles toward the fiscal cliff, there’s an increasingly frantic search for ways to shore up the country’s deteriorating balance sheet. Republicans want to cut spending; Democrats would prefer to raise taxes on the wealthy. But a paper released today by Harvard and Danish researchers highlights just how much room there could be to generate more government revenue without sacrificing economic efficiency—in other words, the type of policies that both parties could conceivably learn to love. The study analyzes the responses of Danish taxpayers to savings incentives—much like those that exist for American 401(k) and IRA accounts—and also behavioral “nudges” that automatically deduct retirement savings from workers’ paychecks. It turns out that savings incentives had scarcely any impact on the rate at which Danes accumulated nest eggs, while the nudges were very effective in making people save. These findings suggest that 401(k) plans and their brethren—which cost the U.S. government as much as $100 billion a year in lost revenue—don’t do much to further their stated objective of boosting retirement savings. Even if $100 billion wouldn’t go all that far toward solving America’s debt problems, it suggests that smart approaches to eliminating or improving government programs could quickly add up to fiscal solvency—and might help the two sides find common ground. The reason we have tax shelters like the 401(k) is to change the relative cost of spending money today versus saving for tomorrow. Exempting retirement investments from taxation increases the saver’s return on his investment, so a rational cost-benefit calculation should lead most people to put something away for the future. In theory, such tax shelters should go some way toward correcting Americans’ problem of undersaving. CONTINUE READING..

Today’s Headlines 10.24.12

NATION
Firm didn’t verify steroid was sterile
Massachusetts officials track shipments of prescription drug linked to deadly meningitis outbreak.
( by Sharon Begley , Reuters)
U.S. developing new blueprint for hunting terrorists
THE PERMANENT WAR | Over past two years, Obama administration has been secretly developing a new blueprint for pursuing terrorists, a next-generation targeting list called the “disposition matrix.”
( by Greg Miller , The Washington Post)

Bar code security woes with airline boarding passes
Terrorists or smugglers could take advantage of security flaws in airline boarding passes, experts say.
( by James Ball , The Washington Post)
Talking shop with the top Girl Scout
“Sixty-one percent of girls are either ambivalent about leadership or say it’s not important to them.”
( by Tom Fox , The Washington Post)

Guilty plea in CIA leaks case
Former undercover agency operative John C. Kiriakou could spend up to 30 months in prison.
( by Greg Miller and Sari Horwitz , The Washington Post)
More National: Breaking National News & Headlines – Washington Post


LOCAL
I-95 North in Stafford reopened after crash
Left lane still blocked as crews work to clean up a diesel fuel spill following a tractor-trailer crash. Delays expected.
( by Curt Anderson , The Washington Post)

Women earn less than men, even one year out of college
One year after graduation, the Class of 2008’s women were making 82 percent of what their male counterparts were paid.
( by Jenna Johnson , The Washington Post)
800 gather to support Md. Dream Act
Minister urges supporters to get on phones and encourage friends and relatives to vote in referendum.
( by Robert Samuels , The Washington Post)

D.C.’s top speed camera slows some drivers, tickets the rest
The city raked in $178.4 million in traffic fines in the last fiscal year, a 32 percent increase from the previous year.
( by Ashley Halsey III , The Washington Post)
Penn St. teacher sues think tank, magazine
A Penn State climate science professor has sued a Washington-based think tank and a national magazine that called his scientific findings fraudulent and compared him to Jerry Sandusky.
( by Keith L. Alexander , The Washington Post)

More Post Local: Washington, DC Area News, Traffic, Weather, Sports & More – The Washington Post


POLITICS
Ryan will hit economic notes in Ohio
In Ohio today, vice presidential candidate Ryan is set to highlight a different side of Romney, casting him as a compassionate conservative.
( by Nia-Malika Henderson , The Washington Post)
Romney woos Colorado Dems, independents
Romney urges Colorado crowd to help him win support of independents and Democrats.
( by Dan Balz and Philip Rucker , The Washington Post)

Strategies for the home stretch
In the campaign’s endgame, Obama will run as an underdog, while Romney will adopt the mantle of front-runner.
( by Philip Rucker and David A. Fahrenthold , The Washington Post)

Are Spanish-language media outlets vital for candidates’ pitches?
President Obama and GOP challenger Mitt Romney are taking different paths to reach Hispanic voters in the swing state of Florida.
( by Jason Horowitz , The Washington Post)
The many motives of a mega-donor
Sheldon Adelson’s giving supports his political and business interests, but also more selfless pursuits.
( by Marc Fisher , The Washington Post)

More Post Politics: Breaking Politics News, Political Analysis & More – The Washington Post


STYLE
Carolyn Hax: Dreading the old object of desire coming to town
The crush is long over, and bad feelings about her actions linger.
(, The Washington Post)
Florida’s Puerto Ricans: Swing voters in a swing state
Their population has increased quickly, creating another wild card in the presidential election.
( by Joel Achenbach , The Washington Post)

Come up to the lab
Guest narrators for “The Rocky Horror Show,” produced by the Washington Savoyards, recall the first time they saw the cult musical.
( by Jessica Goldstein , The Washington Post)
Getting to school is not always easy
Susan Hughes’s ‘Off to Class’ shows how kids around the world get an education even in difficult conditions.
(, The Washington Post)

Tom Sietsema’s First Bite: Shawafel
A Lebanese shop joins the list of late-night eats along H Street NE.
(, The Washington Post)
More Style: Culture, Arts, Ideas & More – The Washington Post


BUSINESS
Venture capital investments down
Uncertainty surrounding the presidential election may be making it harder for some VC firms to raise money.
( by Steven Overly , The Washington Post)
New rules for governing debt collectors
Starting Jan. 2, the Consumer Financial Protection Bureau will regulate 175 debt collection firms that each bring in more than $10 million in annual receipts.
( by Danielle Douglas , The Washington Post)

Can’t fix an error in credit report? Call on the CFPB.
The watchdog agency has begun accepting individual complaints about credit bureaus.
(, The Washington Post)
Senators urge financial industry not to sit on sidelines as ‘fiscal cliff’ nears
Democrat Warner and Republican Chambliss push for engagement in finding a way to avert economic hit.
( by Dina ElBoghdady , The Washington Post)

Apple stock falls after iPad mini launch
Its market share slipping, the tech giant unveils its $329-and-up 7.9-inch tablet.
( by Hayley Tsukayama , The Washington Post)
More Business News, Financial News, Business Headlines & Analysis – The Washington Post


SPORTS
TV and radio listings: October 24
(, The Washington Post)
Madison’s Brooks guts one out
GIRLS’ GOLF | Madison’s Shannon Brooks shakes off some late struggles to birdie the final hole and win VHSL girls’ championship.
( by Brandon Parker , The Washington Post)

Fairfax rallies by Langley
VOLLEYBALL | Rebels overcome loss in first set to run off three consecutive wins to turn back the Saxons.
( by Matt Brooks , The Washington Post)
Zito to start Game 1 for Giants
NOTEBOOK | Two years after being left off the postseason roster, Barry Zito will start Game 1 of the World Series.
( by Barry Svrluga , The Washington Post)

Who will make the Md. playoffs?
We examine which teams are in the Maryland playoffs, which teams are in with a win and which teams are still alive.
( by Greg Schimmel , The Washington Post)

More Sports: Sports News, Scores, Analysis, Schedules & More – The Washington Post


TECHNOLOGY
Apple’s new Mac Mini
Apple has updated its smallest Mac, adding new processor, ports.
( by Hayley Tsukayama , The Washington Post)
Apple surprises with 4th-generation iPad, faces backlash
Apple’s surprise iPad announcement may not sit well with users
( by Hayley Tsukayama , The Washington Post)

Apple’s iPad mini: Here are the basic specs
Check out the price, size and the bells and whistles on the tiny tablet.
( by Hayley Tsukayama , The Washington Post)
Microsoft announces details of Xbox SmartGlass app
App extends your entertainment experience across the  screens of the TV, tablet, phone and PC.
( by Dean Takahashi | VentureBeat.com , VentureBeat.com)

Apple to stream event; ‘iPad mini’ expected
In a surprise, Apple said it will livestream its announcement Tuesday over its own devices.
( by Hayley Tsukayama , The Washington Post)
More Technology News – The Washington Post


WORLD
At Afghan shrine, ancient treatment for mental illness
Mental health patients are chained to a cell for 40 days of living on bread, water and black pepper.
( by Kevin Sieff , The Washington Post)
U.S. developing new blueprint for hunting terrorists
THE PERMANENT WAR | Over past two years, Obama administration has been secretly developing a new blueprint for pursuing terrorists, a next-generation targeting list called the “disposition matrix.”
( by Greg Miller , The Washington Post)

China’s military prepares for change
Along with next month’s political transition, sweeping turnover is coming to the world’s largest army.
( by Keith B. Richburg , The Washington Post)
Nerves over China’s military spending
The growing spending, worrisome to neighbors, is allowing PLA to embark on sweeping modernization program.
( by Keith Richburg , The Washington Post)

Presidential debate: Middle East pays little attention, while China listens
Many around the world remained more focused on the hefty issues that they will confront no matter who occupies the White House.
( by Michael Birnbaum and Keith B. Richburg , The Washington Post)
More World: World News, International News, Foreign Reporting – The Washington Post


EDITORIAL
What Romney’s moderation conceals
Despite his move to the center, he sits atop a radical GOP.
(, The Washington Post)
Groupthink Live
How conventional wisdom congeals in 2012.
(, The Washington Post)

Bench the Bible verses
Proselytizing has no place at a public high school football game.
(, The Washington Post)  

Remembering George McGovern
(, The Washington Post)

More Opinions: Washington Post Opinion, Editorial, Op Ed, Politics Editorials – The Washington Post


LIVE DISCUSSIONS
Vintage shopping and small space decorating with Sanity Fair blogger Skyla Freeman | HOME FRONT
Designing children’s rooms with Nancy Twomey | Home Front
(, vForum)

Who won the third debate? Obama or Romney
Associate editor Robert Kaiser live chats with readers to take questions on the presidential debate.
(, vForum)
Eugene Robinson Live
Live chat with Eugene Robinson about his latest columns and political news.
(, vForum)
ComPost Live with Alexandra Petri
The Compost, written by Alexandra Petri, offers a lighter take on the news and political in(s)anity of the day.
(, vForum)
Tuesdays with Moron: Chatological Humor Update
Gene Weingarten brings you an update to his monthly Chatological Humor live chat.
(, vForum) 

Sunday News Headlines 10.21.12

NATION
Rapid expansion of U.S.-trained Afghan security force comes at a cost
Soldiers, policemen far from ready to take over country, casting doubt on Pentagon’s focus on numbers.
( by Rajiv Chandrasekaran , The Washington Post)
Meningitis outbreak puts researchers in unexplored territory
New form of the disease is without precedent.
( by David Brown , The Washington Post)
More National: Breaking National News & Headlines – Washington Post


LOCAL
Problems thwart replacement of overpass in Md.
Crews had to halt plans to remove an old section of an overpass for the Baltimore-Washington Parkway.
( by Martin Weil , The Washington Post)
Land-use decisions haunt Alexandria City Council election
Development drives questions in Alexandria’s City Council race
( by Patricia Sullivan , The Washington Post)

Kaine, Allen hunt for votes
Senate candidates spent Saturday making in-person appeals.
( by Ben Pershing and Laura Vozzella , The Washington Post)
Opponents of Virginia power line plan say it zaps James River’s history
Utility wants to build transmission line, towers across river, navigated by the first Colonial settlers in 1607.
(, The Washington Post)
Students hope for ‘Dream’
Montgomery College already gives qualified undocumented students a break on tuition.
( by Nick Anderson , The Washington Post)
More Post Local: Washington, DC Area News, Traffic, Weather, Sports & More – The Washington Post


POLITICS
Land-use decisions haunt Alexandria City Council election
Development drives questions in Alexandria’s City Council race
( by Patricia Sullivan , The Washington Post)
Kaine, Allen hunt for votes
Senate candidates spent Saturday making in-person appeals.
( by Ben Pershing and Laura Vozzella , The Washington Post)
Obama and Romney hit final stretch
As a close presidential campaign reaches its last two weeks, candidates make final arguments.
( by Karen Tumulty , The Washington Post)
Maryland gambling issue has netted $56 million from companies for ads
The money is being shelled out at a rate of $6 million a week and exceeds what the candidates spent in Maryland’s last two gubernatorial races combined.
( by John Wagner , The Washington Post)
Obama outspent Romney in September
The president is pressing his financial advantage over his Republican challenger, spending more than twice as much money in September, according to new federal disclosure documents.
( by T.W. Farnam , The Washington Post)
More Post Politics: Breaking Politics News, Political Analysis & More – The Washington Post


STYLE
Friend the one venting and shoot the messenger
A sister-in-law vents about her difficult life and a mutual friend betrays the confidence. Don’t dismiss the message just because the messenger botched the job.
(, The Washington Post)
More Style: Culture, Arts, Ideas & More – The Washington Post


BUSINESS
TechBits: Paper
With easy social media sharing and a nifty “rewind” feature, Paper makes for a good free notebook app for iPad, though it could use more color.
(, The Washington Post)

TechBits: Pocket Planes
This oddly compelling mobile game aims to make you an airline tycoon one plane at a time.
(, The Washington Post)
Debt settlement rarely works
Only about one in 10 consumers participating in debt-settlement programs actually ends up debt-free in the promised period of time, according to a consumer alert.
(, The Washington Post)

U.S. jobs or more outsourcing?
This could be the question faced by one mortgage-servicing company.
( by Allan Sloan and Doris Burke Special to The Washington Post , The Washington Post)
BP’s pivotal, multi-billion-dollar moment
Oil giant must decide whether to sell stake in Russian oil venture and must settle with the Justice Department on the 2010 oil spill.
( by Steven Mufson , The Washington Post)
More Business News, Financial News, Business Headlines & Analysis – The Washington Post


SPORTS
TV and radio listings: Oct. 21
(, The Washington Post)
United clinches postseason berth
Lewis Neal scores in the closing moments as D.C. United secures its first playoff berth in five seasons in front of its largest home crowd of the season.
( by Steven Goff , The Washington Post)
Cavs lose sixth in a row, fall to Deacons
Chad Hedlund’s three field goals and Wake Forest’s improved defense help beat mistake-prone Virginia.
( by Hank Kurz Jr. , The Washington Post)
Midshipmen win third straight
Keenan Reynolds throws a four-yard touchdown pass to Matt Aiken with just over two minutes remaining as Navy rallies past visiting Indiana.
( by Gene Wang , The Washington Post)
E. Roosevelt rises up
Raiders Coach Tom Green changes up his personnel, and the result is a 39-0 win over previously unbeaten DuVal.
( by Steve Yanda , The Washington Post)
More Sports: Sports News, Scores, Analysis, Schedules & More – The Washington Post


WORLD
Rapid expansion of U.S.-trained Afghan security force comes at a cost
Soldiers, policemen far from ready to take over country, casting doubt on Pentagon’s focus on numbers.
( by Rajiv Chandrasekaran , The Washington Post)
Lebanon’s government under pressure
Anti-Syrian opposition urges ouster of Hezbollah-led government after top official’s assassination.
( by Liz Sly , The Washington Post)

Golden Dawn rises in Greece
To fulfill its promise of a Greece for Greeks alone, the party appears willing to go to great lengths.
( by Anthony Faiola , The Washington Post)
In Japan, more fossil fuels, more greenhouse gas
With nuclear plants idled, Japan backs away from old emissions-cutting targets
( by Chico Harlan in TOKYO , The Washington Post)
Beirut killing raises fear of Syria effect
Maj. Gen. Wissam al-Hassan had been closely allied to Lebanon’s anti-Syrian factions.
( by Liz Sly and Ahmed Ramadan , The Washington Post)
More World: World News, International News, Foreign Reporting – The Washington Post


EDITORIAL
Investigating Jim Graham
A test for D.C.’s new ethics panel
(, The Washington Post)
Promises and Pell grants
The presidential candidates like federal tuition aid, but they won’t address a looming shortfall.
(, The Washington Post)
Mr. Romney’s leaky bucket
Capping deductions won’t raise enough to pay for his tax cut.
(, The Washington Post)
The path to cultural diversity
(, The Washington Post)
How Teddy won
(, The Washington Post)
More Opinions: Washington Post Opinion, Editorial, Op Ed, Politics Editorials – The Washington Post

Student Loan Debt Up Again Among New College Grads CLASS OF 2011 GRADUATES INTO SLOW MARKET WITH INCREASED AVERAGE DEBT

Two-thirds of the national college class of 2011 finished school with loan debt averaging $26,600, up about 5 percent from the class before it, according to the latest figures calculated by the Institute for College Access and Success. The report does not include the debt of for-profit college graduates, who typically borrow more than their public university counterparts. But there’s a bright spot; even those who graduated indebted into an economy with an 8.8 percent unemployment rate in 2011 were better off than those without a degree, the report noted. The unemployment rate for those with only a high school credential last year was 19.1 percent. Read it at The Loop 21.