KeNo's Housing and Economic Portal: Thursday April 1 Housing and Economic stories

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Defaulted loans may haunt seniors - (finance.yahoo.com) A little–noticed law could soon result in smaller Social Security checks for hundreds of thousands of the elderly and disabled who owe the U.S. money from defaulted loans and other debts more than a decade old. Social Security benefits are off–limits to creditors, such as credit–card companies and banks. But the U.S. can collect debts to federal agencies by "offsetting," or withholding Social Security and disability payments. The Treasury currently withholds benefits of 3.1 million Social Security recipients to recover defaulted student–, farm– and small–business loans, unpaid income taxes, amounts veterans owe for health care, and other debts to the government. Previously, the U.S. hasn't been able to withhold Social Security payments to recover most debts delinquent for more than ten years. But a provision in the 2008 Farm Bill lifted the ten–year statute of limitations on the government's ability to withhold Social Security benefits in collecting debts other than student loans—for which the statute of limitations was lifted in 1997—and income taxes, where the limit remains 10 years. This means that a person who defaulted on a small–business loan in 1995, for example, and who is receiving Social Security could be notified that his benefits may be reduced each month until the debt, with interest, fees, and penalties, is paid. The Treasury can withhold 15% of the benefit, though it can't be reduced to below $750. Tax debts have no floor.

Las Vegas Mayor Says City Should Fire All Workers - (www.lvrj.com) If Las Vegas can't get the desired wage concessions out of its employee unions, the city should simply fire everyone and offer to rehire them to work a shorter workweek, Mayor Oscar Goodman said Wednesday. "I'm trying to save jobs. I really am," Goodman said. "If it's a strong-arm tactic, so be it. "If it's legal, I'm going to propose it to the council. I think it's the only way we're going to save jobs." Goodman ordered the city attorney to study the possibility. The idea didn't go over well with the unions. Several union presidents went so far as to call the mayor a bully. Councilman Ricki Barlow also said he disagreed with the mayor. There are 146 people's jobs on the chopping block right now as the city prepares for the 2011 fiscal year, which starts July 1. The City Council approved a preliminary budget plan Wednesday containing layoffs and service cuts that aren't as severe as what was initially proposed. There was extra money in the Fire Department's budget to stave off layoffs, and a community push to salvage programs at the Reed Whipple Cultural Center worked -- at the expense of an extreme sports program the city runs. The city faces a $70 million budget hole to fill and most likely a $40 million deficit in the next fiscal year, and the proposed solution to that hasn't changed. All employees, Goodman said, should forgo their scheduled raises and accept 8 percent pay cuts in each of the next two years.

Two Sets of MD Pension Books: One with Real Salaries, the other Includes What Government Documents Refer to as "Phantom" Cost-of-Living Adjustments - (Mish at globaleconomicanalysis.blogspot.com) As noted on numerous occasions, public union greed and arrogance has no bounds. Worse yet, today we have yet another major example that shows many elected politicians still have zero political willpower to do anything serious about it. In Montgomery, Maryland, the politicians are even willing to cook the books for the benefit of unions. Please consider Montgomery, Md., pension deal eases sacrifice for unions. The politics of shrinking government spending can lead to tortured math and bureaucratic back flips. In one of the Washington area's wealthiest counties, recession has prompted a bout of creative bookkeeping and something called the "Phantom COLA." As state and local officials from California to Miami have sought to cut payroll costs, officials in Montgomery County last year pressed government employees to forgo part of their negotiated pay raises. They did. But some of the county's powerful public employee unions also benefited from an unusual deal. Employee pensions -- already a major cost -- will be calculated as if employees had received their full raises. To manage that financial sleight of hand, county computer programmers must essentially set up two sets of books, one with employees' real salaries and another that includes what government documents refer to as the "phantom" cost-of-living adjustments.

Selling mansion? Expect to wait 3 years! - (lansner.freedomblogging.com) The latest O.C. home inventory report from Steve Thomas at Altera Real Estate says it may take nearly 3 years to sell the typical O.C. mansion by his math … “At the current pace, the overall market is a seller’s market without much appreciation at all. The number of distressed homes within the Orange County housing market is keeping a lid on appreciation. On the other hand, the higher end price ranges are experiencing a deep buyer’s market, the higher the price range, the deeper the buyer’s market. The hottest price range is homes priced between $250,000 and $500,000, with an expected market time of 1.75 months. Contrast that with homes priced above $4 million with an expected market time of 33.89 months.”

Kansas City School District Faces Bankruptcy, Closes 29 of 61 schools; Every Child Left Behind For Decades - (Mish at globaleconomicanalysis.blogspot.com) Please consider Kansas City Closing 26 Public Schools: Facing potential bankruptcy, the board that governs the once flush-with-cash Kansas City school district is taking the unusual and contentious step of shuttering almost half its schools. Administrators say the closures are necessary to keep the district from plowing through what little is left of the $2 billion it received as part of a groundbreaking desegregation case. The Kansas City school board narrowly approved the plan to close 29 out of 61 schools Wednesday night at a meeting packed with angry parents. The schools will close before the fall. Emotional board member Duane Kelly told the crowd of more than 200 people Wednesday night, "This is the most painful vote I have ever cast" in 10 years on the board. Some chanted for the removal of the superintendent, while one woman asked the crowd, "Is anyone else ready to homeschool their children?" Under the approved plan, teachers at six other low-performing schools will be required to reapply for their jobs, and the district will try to sell its downtown central office. It also is expected to cut about 700 of the district's 3,000 jobs, including about 285 teachers….. Simple Question: This problem did not happen overnight. School enrollment is half what it was 10 years ago. So why did it take 10 years for the district to do something? Please note that Covington took the job in July 2009 according to Wikipedia. On that basis he can be commended for doing a job long neglected for 10 years.

US budget deficit hits record $221bn - (www.news.bbc.co.uk) The US government recorded a budget deficit of $221bn (£147.6bn) in February - the largest monthly deficit in its history. The total deficit since the beginning of the fiscal year in October now stands at $651.6bn, the figures from the US treasury show. That puts it on track to beat last year's record annual budget deficit of $1.4tn. Treasury Secretary Timothy Geithner called the deficit "unsustainable". However, he maintained that running the deficit was helping the US continue its recovery from the recession in the short-term. Like the UK, the US is suffering from a fall in tax receipts due to tough economic conditions, while relying on increased spending to drive the recovery. But analysts called the figures "frightening". Earlier this year, the Congressional Budget Office (CBO) said it expected the budget deficit to fall this year as the recovery takes hold.