Americans swap homes for hotels as recession bites

CAMBRIDGE, Massachusetts (Reuters) - Some Americans are swapping homes for motels as the ranks of the homeless swell during the recession, crowding out shelters and forcing cities and states across the country to find new types of housing.
In Massachusetts, a record number of families are being put up in motels due to high unemployment and the rising number of homes going into foreclosure, costing taxpayers $2 million per month but providing a lifeline for desperate families.
"I feel like this has saved my life," said Tarya Seagraves-Quee, a 37-year-old former nurse.
Seagraves-Quee has lived in a cramped one-bedroom suite in a hotel in Cambridge, Massachusetts, with three of her four children for nearly two months. "I'm managing the best way possible. I've learned to make things in the microwave oven."
In Massachusetts, homeless shelters are at capacity. State law requires temporary accommodation for those without shelter, leading authorities to place 830 families, including 1,125 children, in 39 motels -- an unprecedented number.
"This truly is the highest we have ever seen it," said Nancy Paladino, director of the family team for the Boston Health Care for the Homeless.
Other cities are noticing a similar trend. In Indianapolis, Indiana, overcrowded homeless shelters are turning families away, forcing growing numbers to seek vouchers for hotels provided by nonprofit groups such as United Way.
"Anecdotally, it's increased," said Michael Hurst, director of the Coalition for Homeless Intervention and Prevention Indianapolis. The advocacy group started to compile statistics on the number of homeless families living in hotels this year after noticing signs of an increase.
"The hotel owners will tell you it has increased. The homeless service providers and the school officials will say we know there are more people living in hotels and putting their kids in school because that is the address they are giving us."
'JUST A STEPPING STONE'
In the Dallas-Fort Worth metropolitan area, the large Wilson family turned to a budget motel as a weeklong transition between a homeless shelter and an apartment.
"Each step we're going it's just a stepping stone," said 42-year-old Frederick Wilson as he sat with his wife, Annette, in a one-bedroom suite they share with four of the six children in their care, including a grandchild.
Called by God, they said, to move from Minnesota to Texas, the family has rapidly made a shift from homeless status to paid employment. Annette has just landed a job as a bus driver, while Frederick said he will work in an office that offers clerical support to Medicaid patients.
They spent two-and-a-half weeks in a homeless shelter in Dallas and were preparing to move into an apartment from the motel. The Urban League, an organization that helps struggling African Americans, is paying the $204 cost of their suite, which does not include sheets, pillows or toilet paper.
In Phoenix, demand for emergency accommodation is swamping available services as the recession and spiraling foreclosures turn even more families out of their homes.

Obama mulls bailout funds for small business

WASHINGTON (Reuters) - The Obama administration is considering a plan to help small businesses through the economic downturn by diverting some of the billions of dollars approved by Congress for bank bailouts, but the idea is at a very preliminary discussion stage, officials said on Friday.
The proposal to shift part of the $700 billion bank bailout program to millions of smaller firms would allow the administration to help one of the largest sources of job creation in the U.S. economy.
The idea is among many possible economic support efforts that have been discussed by the Treasury, White House and Small Business Administration, but no decisions are imminent.
"There has been no determination," said one administration official. "There have been many, many ideas and many possible steps that have been thrown out for consideration among the members of this administration, so any consideration of this idea is extremely preliminary."
The Washington Post on Friday reported that Treasury Department officials are floating the idea of using bailout funds to expand a Small Business Administration program that helps small businesses borrow money from banks at low rates.
Under that plan, lines of credit for small companies could be increased. The government would step in and repay a loan, maybe as much as 90 percent of it, if a company defaulted.
At a White House meeting last week, Treasury Secretary Timothy Geithner showed support for the proposal while National Economic Council director Lawrence Summers had reservations, but neither has taken a final stand on the plan, the Post said.
The newspaper said administration officials told it discussions are in the early stages and a final plan is not likely before autumn.
The internal debate over using some of the financial bailout money to help small business comes as market confidence in the stabilization of the economy has weakened, and rising concern about continued job losses.
President Barack Obama and Democrats are trying to fend off criticism from Republicans that a $787 billion economic stimulus is not working, and some are discussing the possibility of a second stimulus plan.
At a House of Representatives hearing on Friday, Geithner said the stimulus program was "on its expected path" in putting money in taxpayer pockets, and promised that infrastructure investments would have their "maximum effect" on the U.S. economy in the second half of the year.
Using funds from the Troubled Asset Relief Program would provide a source of already approved funds, but it could cause anger among members of Congress who approved the program to keep the financial sector from collapsing.
After 10 large banks returned $68 billion in taxpayer funds last month, the Treasury has about $127 billion in uncommitted TARP funds at its disposal.

Allen Stanford lightly regulated by Florida: newspaper

MIAMI (Reuters) - Florida regulators seldom checked the Miami operations of Allen Stanford after giving the accused fraud master unprecedented freedom to send cash overseas and sell investment securities, the Miami Herald newspaper reported on Sunday.

Beginning in 1998, the newspaper said, Stanford had clearance from Florida bank regulators to move money from a Florida office to Antigua without filing reports to government agencies and to sell certificates of deposit to wealthy investors without fraud checks.

"Over objections by the state's chief banking lawyer -- including concerns that Stanford was laundering money -- regulators granted sweeping powers never given to a private company," the newspaper said.

Now in jail, after last week being refused bail by a judge in Houston, Stanford, 59, faces criminal charges for a $7 billion Ponzi scheme involving high-yielding certificates of deposit at his bank in the Caribbean island of Antigua.

Stanford says he is innocent of the charges and that his multinational business was legitimate until the federal regulators gutted it by filing civil charges, which led to the confiscation of all his assets by a court-appointed receiver.

Stanford's Miami office was lushly appointed and one of the best producing in Stanford's company, which frequently focused on Latin American clients, according to the Miami Herald.

"There was no lawful way that office should have been opened," the newspaper quoted Richard Donelan, the state's chief banking counsel, as saying.

Donelan told the newspaper that he argued during the late 1990s that the Stanford proposal broke Florida law and substantial questions existed about whether Stanford's bank complied with laws and money laundering in the Caribbean.

After winning the right, never before granted in the state, to run a foreign trust office, Stanford sold certificates of deposit without reporting the purchases, the newspaper said, citing state and court records.

"In the first six years, the office -- known as Stanford Fiduciary Investor Services -- took in $600 million from customers, state records show," according to the newspaper.

The newspaper said that the Miami offices, unlike other Stanford companies elsewhere in the United States, bypassed rules requiring regular reports to officials of the amounts of money sent overseas.

"In fact, employees shredded records of the trust agreements and (certificate of deposit) purchases once the original documents were sent to Antigua, state records show," the newspaper said.

State examiners visited the Stanford office three times over the past 10 years, the newspaper said.

An official of Florida's Office of Financial Regulation was not immediately available on Sunday to respond to the newspaper story, but the Herald said officials at agency had refused to comment other than to say they were reviewing the 1998 decision.

Disney worker dies in Florida monorail collision

MIAMI (Reuters) - A Walt Disney World employee died on Sunday in a collision of monorail trains carrying tourists at the theme-park complex in central Florida, according to a theme park spokeswoman.

The futuristic elevated trains collided near the entrance to the sprawling resort's Magic Kingdom park around 2 a.m. Eastern time, according to spokeswoman Zoraya Suarez.

Details of injuries were not immediately available, she said, though local media reported no tourists were seriously injured. The cause of the crash was being investigated, according to local police.

Disney World, a unit of the Walt Disney Co, has closed the monorail system used to carry tourists to parks and hotels, but otherwise was operating normally, according to Suarez and Mike Griffin, a vice president at the resort

Schwarzenegger signals key budget concession

SAN FRANCISCO (Reuters) - Governor Arnold Schwarzenegger, optimistic California can finish its budget negotiations in a few days, is willing to reconsider his proposed cuts to education in hopes of averting a cash crisis, the San Francisco Chronicle said on Saturday.

A compromise between the Republican governor and Democratic lawmakers may help clear the way for an agreement on an overdue state budget and avert a cash crisis for the government of the most populous U.S. state. California already is issuing billions of dollars in "IOUs" and, without a deal, is on track to run out of cash this month.

The San Francisco Chronicle reported that Schwarzenegger, in a Friday meeting with its editorial board, said he would be willing to reconsider his proposal to help reduce California's $26.3 billion budget deficit with cuts to school spending that would require suspension of constitutional rules on education expenditures.

"We are not stuck ... about the suspension," Schwarzenegger said during the meeting. "We've got to analyze all this."

He said budget negotiations are moving fast. "I think if we continue this way we can get this done in the next few days," he said.

Backing off on education spending cuts would go a long way with Democrats who control the state legislature.

On Thursday Democrats said they would no longer hold out for increasing taxes to help raise revenues to fill the budget gap. That was a major concession to Schwarzenegger and Republican lawmakers, who had opposed tax hikes and pressed for balancing the state's books with deep spending cuts.

That helped Republicans gain confidence that a budget deal could be reached soon.

"I think there is at least a 50-50 chance that we'll find a solution that is acceptable to all parties within a week," Assembly Republican Leader Sam Blakeslee said.

Democrats see backing off on education spending cuts as an important concession by Schwarzenegger.

"While taxes may be off the table, education cuts also have to be off the table," Democratic state Senator Leland Yee told Reuters.

GRIM REVENUE OUTLOOK

Lawmakers failed to agree on balancing the state's budget on Tuesday and the state government began its fiscal year on Wednesday without a spending plan in place.

In response, state finance officials began issuing "IOUs" in lieu of payments for tax refunds owed to taxpayers to preserve cash from higher prior payments, including payments to investors holding the state's debt. They warned that local agencies overseeing health programs and a variety of recipients of state financial aid, including the disabled and college students, could be in line for IOUs.

The state controller plans to issue more than $3 billion this month in registered warrants promising payments if Schwarzenegger and lawmakers fail to agree on a budget

California is experiencing a severe revenue downturn as a result of the recession, rising unemployment and the lengthy housing downturn that will leave the state's government with an austere budget. It likely will force additional spending cuts throughout the fiscal year.

"The reality is that the revenues are not looking good," Yee said. "We just simply don't have the money to keep up the pace of services we're providing."

California finance officials hope a budget deal is reached soon so they can stop their IOU effort, which aims to reassure the municipal debt market that the state will honor its bond payments ahead of nearly all other obligations.

Finance officials also want to reassure the market in anticipation of having to sell short-term debt for cash-flow purposes once a budget deal is reached.

California's budget turmoil has made Wall Street nervous. Standard & Poor's warned in a statement on Wednesday that if California's budget is not settled soon, the state's A-credit rating, already the lowest of any of the 50 states, is at risk of falling.

Autopsy planned for slain NFL star Steve McNair

NASHVILLE (Reuters) - Autopsies were being performed on Sunday on the bodies of former NFL quarterback Steve McNair and a female friend who were found shot to death on Saturday in a Nashville apartment, police said.

McNair, who was 36, was shot multiple times, according to a statement posted late Saturday on the Nashville police website. Sahel Kazemi, 20, was also found dead in the living room of the condominium with a single bullet wound to her head.

A pistol was found near Kazemi's body. The police offered no possible motive for the killings, and a spokesman was not available for comment on Sunday.

A witness reported that McNair arrived at the condo early Saturday morning. Kazemi's vehicle was already parked outside, the statement said.

McNair rented the condo with sporting goods dealer Wayne Neeley, who arrived there before 1 p.m. on Saturday and found the two bodies. Neeley called a friend who came to the scene and called the police.

Two days earlier, Kazemi had been arrested in the early hours for driving under the influence. McNair was in the passenger's seat at the time of the police stop.

McNair, who played 13 seasons in the NFL, was a local hero who did extensive charity work in Nashville. He played mostly with the Tennessee Titans and its predecessor team, the Houston Oilers.

Drafted by the Oilers in 1995 out of Alcorn State College in Mississippi, McNair led the Titans to their only Super Bowl appearance, losing to the St. Louis Rams in 2000.

He was the NFL's co-MVP in 2003, and was selected for the Pro Bowl three times. McNair ended his career with the Baltimore Ravens and retired after the 2007 season.

According to local press reports, Kazemi had moved to Nashville from her parents home in Florida. She worked as a waitress at a restaurant where she met McNair.

McNair was married and had four sons, one of whom, Steven Jr., is a high school football star who has received offers to play college football

Michael Jackson drug reports prompt doctors' warning

LOS ANGELES (Reuters) - Media reports about possible drug use by pop star Michael Jackson the day he died prompted a warning from anesthesiologists on Sunday, as lawyers prepared to square-off in a courtroom battle over his estate.

Reports of prescription drug use have increasingly surfaced since the "Thriller" singer's sudden cardiac arrest more than one week ago, and a police probe is said to be focusing on the role doctors may have played in providing Jackson with at least one powerful medication, anesthetic Diprivan, according to the Los Angeles Times.

Investigators are trying to determine if the drugs, which were found in searches of Jackson's rented Los Angeles mansion, were improperly prescribed and if they had a role in the June 25 death of the "King of Pop" at age 50.

"Numerous bottles," of Diprivan without labels were found at the mansion, according to the Los Angeles Times.

Diprivan, the brand name of propofol, is an anesthetic that "should never be used outside of a controlled and monitored medical setting," the American Society of Anesthesiologists (ASA) said in a statement, noting that its members have not studied the particulars of Jackson's death.

Patients can have extremely variable responses to the drug and some patients can become completely anesthetized, including losing the ability to breathe, the group said.

Two autopsies were performed on Jackson after his death but toxicology results are not expected for weeks.

BATTLE OVER JACKSON'S ESTATE

Meanwhile, the battle over Jackson's estate was set to move forward on Monday, with a hearing scheduled in Los Angeles Superior Court between lawyers for his 79-year-old mother, Katherine Jackson, and attorneys who were named as co-executors of a Jackson will that surfaced late last week.

At stake is a fortune that an attachment to the will estimated could be worth more than $500 million, although Jackson has been reported as deeply in debt the day he died.

Katherine Jackson was granted temporary administrator of Jackson's affairs last week before the will, which names lawyer John Branca and music executive John McClain, as co-executors over the 2002 will, putting his assets in a family trust that benefits his three children, Katherine Jackson, and charities.

A separate hearing over the guardianship of Michael Jackson's children has been postponed until July 13. In the meantime, Katherine Jackson has been named temporary guardian of Prince Michael Jackson Jr. 12, Paris Michael Katherine Jackson, 11, and Prince Michael Joseph Jackson, II, 7.

About 1.6 million people have registered to be one of 8,750 people who will get two free tickets to attend Jackson's public memorial, set for Tuesday morning in downtown Los Angeles