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PhillyDeals: PhillyDeals: Highway tolls a possible topic at Obama confab

President-elect Barack Obama and the National Governors Association are meeting here today in Old City. So what can Obama offer cash-hungry Gov. Rendell and his cronies before they go home to face tight budgets and angry, scared citizens?

"As part of the economic-stimulus package, the federal government could say to the states, 'You can toll any interstate highway and use it to offset maintenance costs and pay for infrastructure projects' " - like road and bridge repairs - suggests Wally Nunn, former Delaware County council member, Philadelphia port chairman and SEPTA director.

"Make it a pay-as-you-go, user-fee deal," adds Nunn. "It would help with their budgetary problems. Otherwise, we'll have to raise taxes to pay for this stuff."

Commuters and truckers don't like tolls. The Pennsylvania Turnpike Commission wanted to toll other Pennsylvania interstates, but was turned down last summer by President Bush's Federal Highway Administration. Rendell's other highway-funding idea - leasing the turnpike - stalled in the General Assembly.

Did this work last time?

"The housing correction is at the root of our economic and market difficulties," Treasury Secretary Henry M. Paulson Jr. said yesterday.

"The most important thing we can do to mitigate foreclosures and progress through the housing correction is to reduce the cost of mortgage financing, so more families can afford to buy a home, and so homeowners can refinance into more affordable mortgages," Paulson said.

Despite the government bailout of Fannie Mae and Freddie Mac, home-loan rates "have not come down as much as we may have hoped," he said. But last week's $600 billion Federal Reserve home-loan finance project should drive rates lower.

"We continue to look for additional ways to make mortgage credit more affordable," Paulson added, "which will stimulate purchases, help to stabilize prices, and end this housing correction."

Sure, we're for affordable housing. But didn't cheap credit for everyone, including speculators and homeowners buying beyond their means, and lenders and investors too greedy to care, get us into this mess?

We hope Mr. Paulson is making sure the folks using the people's money are being more careful this time. Because if you really don't expect to get paid back, they're not really loans.

Better for whom?

Verizon Communications Inc. wants Philadelphia City Council to let it offer its FiOS video service, which would put it in competition with locally based Comcast Corp. cable TV.

Verizon backers say that'll be better for consumers. Comcasters say, no it won't.

We'd love to get guidance and data on that question from the Federal Communications Commission, which is supposed to report on pay-video competition every year. But the 2007 and 2006 reports, which cover the period of FiOS-cable competition, still aren't out. Spokeswoman Mary Diamond wouldn't comment.

As far as we can tell, Verizon shares with Comcast (and satellite TV, and RCN Corp., which competes with Comcast in part of Delaware County) an interest in keeping bills high to protect profit margins.

They'd prefer to "compete on service" rather than cut prices. They don't want to end up like phone companies, selling a low-cost, low-profit commodity. Even though that would be great for many consumers.

Cheap at what price?

Terms of Citigroup's Nov. 24 government bailout roughly resemble those of Citi's proposed Sept. 29 plan to buy Wachovia Corp., with similar levels of federal investment and loan guarantees.

We wondered at the time if the earlier bid were an attempt to rescue Citi, not just Wachovia.

Instead, Wells Fargo & Co. made a sweeter Wachovia offer, pushing aside Citi's.

But if this deal leaves Citi needing its own bailout, Wells-Wachovia could end up costing taxpayers even more than the estimated $25 billion in tax breaks the happy couple will already enjoy, thanks to the recent changes in federal accounting rules for deal-making.


Contact staff writer Joseph N. DiStefano at 215-854-5194 or jdistefano@phillynews.com.

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