Finance & Business World

Germany’s government says it is speeding up its plans to cut its borrowing as it works to balance its budget by 2016.

A senior official said Friday that the federal government will reduce its new borrowing between 2013 and 2016 to euro45.6 billion ($59.5 billion) from the previously planned euro73 billion.

A robust economy has helped increase Germany’s tax intake, allowing the country to run up less new debt. Germany plans to balance its budget in 2016, when it expects to borrow only euro1.1 billion.

Germany has pushed hard for the other 16 countries that use the euro as their currency to get their public finances in order as the continent recovers from the debt crisis.

The official briefed reporters on condition of anonymity because the plan hasn’t officially been released.

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The Senate voted Wednesday to overhaul transportation programs and keep aid flowing to thousands of construction projects while strengthening highway and auto safety.

The 74-22 vote stepped up pressure for quick action by House because the government’s power to collect about $110 million a day in federal gasoline and diesel taxes, the main source of revenue for highway and transit programs, is set to expire March 31. If a final bill isn’t on the president’s desk by then, Congress would have to approve a temporary extension to avoid a shutdown of the programs, including the furlough of Federal Highway Administration employees and the layoff of construction workers.

The White House praised senators for trying to address these critical national needs and expressed hope the House “will move swiftly” and follow suit.

The Senate’s measure would spend $109 billion over about two years and preserve or create an estimated 2.8 million jobs. It would increase the amount of money available for states by raising current spending levels to take into account inflation over the past several years. That’s still far short of the dollars that two congressional commissions have said are needed to maintain aging highways, bridges and rail systems while expanding the nation’s transportation network to accommodate population growth between now and 2050.

The measure would reduce the number of federal transportation programs by roughly two-thirds in an effort to eliminate duplication. Senators preserved bicycle, pedestrian, safe routes to schools and rails-to-trails programs, targeted for elimination by Republicans, under a compromise that means they would have to compete with other programs for money.

For transit commuters, the bill would extend, back to Jan. 1, a tax break that allows the deduction of up to $240 a month tax-free from their paychecks for expenses incurred traveling to work. That had expired at the end of 2011.

On the safety front, the bill would require stricter federal oversight of the long-distance and tour bus industries through deadlines for buses to have seat belts, stronger roofs, anti-ejection windows and rollover crash avoidance systems. The bus industry carries about 750 million passengers a year, roughly the same as the domestic airline industry.

Other safety provisions include requiring that automakers provide rear seat-belt reminder systems to get children and other backseat passengers to buckle up, and testing child safety seats in frontal and side impact crashes.

The bill would let Washington reward states with extra safety money if they require graduated licenses for teenage drivers, permit police to pull over and ticket drivers for seat-belt and booster-seat violations, and mandate that convicted drunken drivers use ignition-lock devices.

Safety advocates criticized the broad exemptions from federal commercial driver’s licensing, vehicle inspection and other safety requirements for agricultural trucks operating with 150 miles of their farms. Farm lobbies said the rules hinder farmers’ ability to get their products to market.

States would have greater discretion over how to spend federal aid. But the bill would mean new requirements aimed at preventing waste and ensuring that national goals are met.

A credit assistance program championed by Los Angeles Mayor Antonio Villaraigosa that helps leverage private investment for transportation projects of national and regional significance would grow by tenfold to $1 billion. In the past, the program has generated as much as $30 in private capital for every $1 in aid.

Sen. James Inhofe, R-Okla., co-author of the measure, said the bill “”probably will go down as one of the most significant pieces of legislation this year.”

One thing the bill would not do is resolve how to keep the federal Highway Trust Fund solvent beyond next year.

The largest sources of money for the fund, which pays for highway and transit programs, are federal fuel taxes: 18.4 cents a gallon for gasoline and 24.4 cents a gallon for diesel. Revenue from those taxes has declined since the economic downturn in 2008 and because the fuel efficiency of cars and trucks is increasing.

The bill would pay for highway programs through a combination of fuel taxes, cuts to other federal programs and tax changes, but also would drain the trust fund. Some senators have criticized provisions that are supposed to pay for transportation programs since they would raise about $10 billion over 10 years, but spend it in the first two years.

Efforts by House Republican leaders to pass their own, five-year bill without concessions to Democrats have fallen apart in recent weeks. The House returns next week from a weeklong recess.

Pointing to the large bipartisan vote in favor of the bill, Sen. Barbara Boxer, D-Calif., urged House Republicans to consider passing the Senate measure as it is “to avert any crisis.”

“Why would they want to reinvent the wheel?” Boxer asked.

Michael Steel, a spokesman for House Speaker John Boehner, R-Ohio, said the House plan is to “take up something that looks like” the Senate bill “unless the House coalesces around a better alternative, which we are actively pursuing.”

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Charles Wyplosz is betting Greece isn

Egypt’s Islamist-dominated parliament called on Sunday for a vote on stopping U.S. aid, but it is unlikely that such a move would oblige the nation’s military rulers to ask Washington to halt $1.5 billion in American aid this year.

The move by the People’s Assembly was sparked by the March 1 departure of six American defendants in a case of 43 employees of nonprofit groups accused of using illegal foreign funds to foment unrest in Egypt. The 43 include 16 Americans, nine of whom were already outside the country when the case was referred to trial. One opted to stay behind and face the trial.

The rest of the 43 are mostly Egyptians, Jordanians, Palestinians and Germans.

The U.S. threatened to cut off aid to Egypt over the issue, but the departure of the six partially eased the crisis, the worst between the two allies in 30 years.

Even if the 508-seat chamber voted to reject U.S. aid, such a move could amount to a symbolic gesture given the wide powers enjoyed by the generals, who collectively act as the presidency, and the likelihood of them approving it in the name of national interest.

The exit of the American defendants, however, kicked off a storm in Egypt, prompting many to accuse the ruling generals of bowing to U.S. pressure and intervening in the work of the judiciary. Egypt’s military has benefited the most from the nation’s close ties with the United States. It is due to get $1.3 billion in aid this year. U.S. economic assistance for 2012 is about $250 million.

In Sunday’s session, lawmakers complained the U.S. had no respect for Egypt’s sovereignty and called for a vote on a no-confidence motion in the military-backed government check cash advance. The move against the government came after four Cabinet ministers briefed the chamber on the case. Lawmakers constantly interrupted their testimonies.

Several lawmakers later said it was the generals and not the government that must be questioned about the nation’s “humiliation” by the United States over the case. The generals have said they had nothing to do with the Americans’ departure and that the entire affair was in the hands of the judiciary. However, the judge who presided over the trial’s opening hearing on Feb. 26 excused himself late last month, citing uneasiness.

Judge Mahmoud Mohammed Shoukri later said in comments to the media that he quit to protest political meddling in the case, which is now being tried by another court, also in Cairo.

“I wish members of the U.S. Congress could listen to you now to realize that this is the parliament of the revolution which does not allow a breach of the nation’s sovereignty or interference in its affairs,” Parliament Speaker Saad el-Katatni, an Islamist from the chamber’s largest party, told lawmakers.

Suggesting that a crisis was looming between the legislature and the Cabinet, el-Katatni adjourned the session until Monday after a two-hour break. He said Cabinet ministers scheduled to answer lawmakers’ questions failed to show up.

“It seems that the government is pushing for a crisis with parliament,” el-Katatni said.

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U.S. local-government payrolls increased last month for the first time since August, easing the drag on the economy brought on by budget-cutting cities, counties and school districts.

The U.S. Labor Department reported today that local- government employment, adjusted for seasonal swings in hiring, expanded by 2,000 in February as school districts boosted hiring. State payrolls slipped by 1,000 after rising by 11,000 in January.

Jim Diffley, an economist with IHS Inc. who tracks regional growth, said it

Now that we know everything there is to know about The New iPad and are busily making plans to camp out overnight when it first hits stores, it

India

Employers probably added more than 200,000 workers for a third straight month in February amid optimism about the U.S. expansion, economists said before a report this week.

Payrolls increased by 210,000 last month after rising 243,000 in January, the most in nine months, and 203,000 at the end of 2011, according to the median projection of 55 economists surveyed by Bloomberg News. It would mark the strongest three- month stretch in almost a year. The jobless rate probably held at an almost three-year low of 8.3 percent.

Bigger employment and wage gains would go further in bolstering household spending, which accounts for about 70 percent of the economy and is threatened by higher fuel costs. Federal Reserve Chairman Ben S. Bernanke said last week that while the labor market is making progress restoring the 8.7 million jobs lost as a result of the recession, it

Bill Gross is now officially in the ETF business. Pimco launched the ETF version of its Total Return Fund Thursday, and experts say it could be a game changer.

The Pimco Total Return ETF () aims to mirror the performance of Pimco’s Total Return Fund (), the world’s largest bond mutual fund with nearly $245 billion in assets. And it will be managed by Pimco founder and chief investment officer Gross himself.

The fact that it is a version of such a popular fund and has Gross’ star power makes Pimco’s newest ETF a litmus test for the actively-managed ETF space.

So far, a good chunk of the 40 or so actively-managed ETFs, which represent just 0.5% of the total ETF market, have struggled to attract sizable assets and trading volumes.

The end of mutual funds is coming

But ETF industry watchers have been hoping Pimco’s ETF will usher in a change.

So does Gross.

"The Total Return ETF harnesses Pimco’s time-tested investment process and our skills as an active manager, and we believe it signals an important new phase in the development of the ETF marketplace," he said Thursday in a statement low fee payday advance.

Earlier this year, Gross said he expects the Total Return ETF will follow in the footsteps of its mutual fund version to become the largest ETF in the world.

But Standard and Poor’s cautions investors from flocking to the ETF out of the gates.

While the ETF version is less expensive that its mutual fund counterpart, boasting an gross expense ratio of 0.55% compared to 0.85%, it’s more expensive than the larger fixed income ETFs in the market, notes Todd Rosenbluth, S&P Capital IQ ETF analyst.

Rosenbluth also warned that the ETF’s holdings are likely to vary slightly from the mutual fund’s holdings, since the Securities and Exchange Commission restricts the use of derivatives in new ETFs.

Trading volume for the Pimco Total Return fund topped out at 550,375 shares, trading just under $100 apiece.  

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Euro-area finance ministers are set to clear a second rescue for Greece today to avoid what Italian Prime Minister Mario Monti described as a potential