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Starting next month, lawmakers will argue until they are hoarse over what to do about various spending bills and the Dec. 31 expiration of the Bush tax cuts.

But make no mistake: The fevered debates will take place in a vacuum.

That’s because lawmakers have yet to seriously address how to rein in the country’s long-term debt. And that broader debate will involve significant policy changes: A likely overhaul of the federal tax code and a reduction in spending across the board.

Policymakers have been mostly mum on the issue. By December, however, they will have a harder time ignoring the matter, since they will have in hand reports from the Bipartisan Policy Center’s Debt Reduction Task Force and President Obama’s fiscal reform commission.

Both panels will starkly lay out the magnitude of changes needed to correct for two unpleasant realities.

The first is a combination of habit and circumstance.

For years, the country was spending more than it was willing to pay in taxes, and then it was hit by a gob-smacking economic and financial crisis that spurred a lot more spending to stem the pain of the downturn.

The second reality, however, is more worrisome to budget experts. Even after the economy recovers, the gap between money out and money in will persist largely because of long-anticipated demographic changes such as the aging of the population. And borrowing to fill that gap could become much more expensive than it has been.

Deficit hawks: A dangerous trajectory

This year, U.S. debt held by the public, which does not include money owed to Social Security and other government trust funds, will top 60% of the country’s economy as measured by gross domestic product. By 2022 it is projected to reach 100%. And by 2035, it’s on track to approach 200%.

By comparison, the average debt held by the public between 1960 and 2000 was just 37%, according to information from the debt reduction task force.

The large leaps in indebtedness mean, among other things, that by the end of this decade, the vast majority of all federal tax revenue will be swallowed up by just four things: Interest payments on the country’s debt, and the payment of Medicare, Medicaid and Social Security benefits.

By 2021, the cost of annual interest payments alone would top that of the defense budget and itself eat up more than half of all federal taxes, according to information from the debt reduction task force payday loan lenders.

On tap: The call for sacrifice

Getting the federal ledger on a more stable track means that future legislative dogfights won’t be about what breaks to offer voters so much as what sacrifices to ask of them.

"If we have not asked Americans to sacrifice, we have failed," said former Sen. Pete Domenici, R-N.M., who co-chairs the debt reduction task force with Alice Rivlin, the former White House budget director under President Clinton.

"And if we have asked you to sacrifice and you choose not to do it, we’ve failed again because we haven’t convinced you that this is one of the few ordeals facing America that is as bad as being in a war," added Domenici, who used to head the Senate Budget Committee.

The task force, and the president’s commission, have said that the entire federal balance sheet is on the table. And they’re both likely to recommend spending freezes, a serious curtailment of many tax breaks and various reforms to entitlement programs, to name just a few.

Still, neither Domenici nor Rivlin believes the effort to deal with the country’s long-term debt will be all spinach and no sugar.

"In every major problem that a great country like ours has, there is a silver lining," Domenici said. His group, for instance, will propose ways to simplify the federal tax code, which both parties have wanted to do for a long time.

Whether Congress chooses to adopt either group’s suggestions is impossible to say. Many deficit hawks believe it will take nothing short of a crisis for Congress to act. A crisis such as the fall of the dollar, loss of confidence in U.S. ability to pay what it owes, rampant inflation, or a sovereign rating downgrade.

Rivlin is more optimistic.

"My hope is that after the [mid-term] election, both parties will see the advantage of working together to get part of this problem behind them," she said. "I believe people are sensible enough to come to grips with this problem long before we’re facing a downgrade of U.S. debt." 

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GMAC Financial Services, the auto and mortgage lender that took three government bailouts to the tune of $16.3 billion last year, posted its first quarterly profit on Monday since receiving Troubled Asset Relief Program, or TARP, funds.

And that’s not all: Now the company, which was once wholly owned by General Motors, wants to change its brand, distancing itself further from the struggling automaker — at least in name. On May 10, GMAC will rebrand itself Ally Financial Inc. to reflect one of its most successful businesses, Ally Bank.

The online bank reported $231 million in income in the latest quarter. After factoring in losses from other divisions of the company, GMAC as a whole, reported first quarter earnings of $162 million, compared with a loss of $675 million in the year-ago quarter.

"We achieved profitability, our premier auto finance franchise continued to expand, the capital markets reopened to GMAC debt, we have reduced expenses, and we took several additional steps to contain and reduce risk in the mortgage business," GMAC Chief Executive Officer Michael Carpenter said in a press release.

GMAC, which finances GM and Chrysler dealers as well as car buyers and home loans, currently has a contract with General Motors to use the "GMAC" trademark until 2016.

But GMAC’s board of directors decided to scrap the name sooner.

It’s a smart move, said branding expert Jack Trout, because it solves two problems. First, it distances the company from its negative association with government bailout money, and second, it expands the name to reflect the company’s retail banking operations outside the scope of auto loans.

"GMAC was always confusing. It was a good name if you’re leasing GM cars, but once you get beyond the automobile world, it’s not good," Trout said. "If you can take advantage of what the word ‘ally’ means, you can use that word to certainly help drive a new idea in."

GMAC shares are not publicly traded, and the government holds a majority stake in it since the company took bailout money.

As of Monday, GMAC has not repaid its TARP funds, a Treasury Department spokeswoman said.

"The company is working toward the timely repayment of the U.S. Treasury’s investments," GMAC spokesman James Olecki said in an e-mail. 

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Rocky Brands Inc. will stop distributing footwear bearing the Dickies label at the end of the year, the work going to an affiliate of the brand’s owner, the company said late Thursday.

Nelsonville-based Rocky Brands (NASDAQ:RCKY) became the exclusive licensee of Dickies boots after its $100 million acquisition of EJ Footwear Group LLC in 2004. The Franklin, Tenn.-based company was composed of three companies that produced footwear under the Georgia Boot, Durango, Lehigh, John Deere an Dickies brands.

Williamson-Dickie Manufacturing Co., based in Fort Worth, Texas, will have its Kodiak Group Holdings Co. develop and market the Dickies footwear business after the licensing accord with Rocky Brands expires Dec. 31.

Rocky CEO Mike Brooks said in a release that “we anticipated it would be difficult for us to retain the Dickies footwear license beyond 2010 and we have been taking steps to replace that business beginning next year. In addition, this decision will allow us the opportunity to dedicate more time and resources to growing our owned brands – Rocky, Georgia Boot, Durango and Lehigh – which carry significantly higher gross margins.”

Dickies boots sales represented about 4 percent of Rocky Brands’ $229.5 million in sales last year, the company said.

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Retail sales soared in March, the government said Wednesday, in the latest sign of improving consumer confidence.

The Commerce Department said total retail sales jumped 1.6% last month, the largest monthly increase since November, from an upwardly revised 0.5% gain in February.

Economists surveyed by Briefing.com had anticipated that sales would rise 1.2% in the month.

March retail sales surged 7.6% compared to the same month in 2009.

Sales excluding autos and auto parts rose 0.6% last month, also topping forecasts. A consensus of economists had projected sales excluding autos to edge up 0.5% in March.

Sales of motor vehicles and parts posted a strong 6.7% gain, while sales of electronics and appliances fell 1.3%.

"This is another good reading," said Adam York, an economist at Wells Fargo. "But we’re not out of the woods yet."

York said March sales benefited from promotions tied to the Easter holiday, which came earlier than usual this year. He said some of those gains may be shifted over to the April report.

"These are decent numbers," he said. "It suggests that the consumer is recovering, but by no means are we looking at a strong economic recovery."

The rebound in retail sales comes as the labor market has shown tentative signs of improvement. The Labor Department said earlier this month that the economy gained more jobs in March than any other month in the last three years guaranteed pay day loans.

Sales at many of the nation’s retail chains reported strong sales in March due to unusually warm weather, Easter shopping and improved consumer confidence.

Thomson Reuters, which tracks monthly same-store sales for 30 chains including Costco (COST, Fortune 500) and Target (TGT, Fortune 500), said last week that chain stores posted the biggest single monthly sales gain on record in March, extending a run of seven straight monthly increases.

All of this bodes well for the economy, which is driven mainly by consumer spending.

After a prolonged slump, U.S. gross domestic product, the broadest measure of economic activity, turned positive in the second half of 2009. But the subsequent gains in GDP have been driven mostly by reductions in business inventories and government stimulus.

The economy remains vulnerable enough for policymakers at the Federal Reserve to maintain interest rates near historic lows to help boost activity.

The Fed will release its latest report on regional economic activity later Wednesday. Separately, Fed chairman Ben Bernanke will testify before a joint session of Congress on the economic outlook.  

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General Motors made it official on Wednesday: It is shutting down the Hummer SUV brand and offering rich rebates in a bid to move the remaining 2,200 vehicles.

Buyers can get $6,000 rebates on a 2009 model year Hummer H2 full-sized SUV or H3 mid-sized SUV.

GM is also offering $5,000 on the 2009 Hummer H3T, a pick-up version of the H3, and $4,000 on the few 2010 H3T’s that were made and remain in stock.

Buyers with good credit can also get 0% financing for six years on all Hummer models.

Hummer H3 prices start at about $31,000.

GM sold fewer than 300 Hummers last month. Hummer sales, which had been suffering anyway largely because of the vehicle’s reputation for poor fuel economy, have been hammered by uncertainty over the brand’s future.

Even a $6,000 rebate may not make a new Hummer a good deal, though, said Jeannine Fallon, a spokeswoman for the automotive Web site Edmunds.com.

Even if the H3 entirely meets your needs, buyers who may want to sell or trade in the vehicle in a few years will want to think twice, she said.

"Five years from now, who’s going to want your car?" Fallon said.

Hummer’s image has been ravaged by environmentalists, she said, and its been damaged even further by the fact that GM decided to discontinue the brand. Besides that, she said, the fuel economy of relatively light-weight crossover SUVs will continue to improve, leaving Hummers even farther behind.

Fallon may be overestimating how much people care about brand image, countered Robyn Eckard, a spokeswoman for Kelley Blue Book’s KBB.com.

"People used to care about brands and what a brand says about them," she said. "Nobody cares anymore."

Today’s car shoppers are looking for deals, she said. And the same will be true in a few years. That big rebate will only make it that much easier for Hummer owners to offer a good deal in the used car market later, she said.

"Hummer is a good deal now, and it will be a good deal five years from now," she said.

The automaker announced last year that it was letting Hummer go as part of its restructuring plan. A planned sale of Hummer to a Chinese heavy equipment manufacturer, which would have allowed production of the SUVs to continue, fell through in February.

General Motors now retains only four brands: Cadillac, Buick, GMC and Chevrolet. Of the four brands GM dropped only one, the Swedish Saab brand, was successfully sold off. It has been purchased by Dutch exotic car manufacturer Spyker.

A plan to sell Saturn to the Penske Automotive Group, an auto dealership operator, fell through after no manufacturer could be found to supply vehicles for the brand after GM stopped. GM is also closing down the Pontiac brand. No attempt was ever made to sell it. 

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The U.S. Department of Commerce announced Thursday that it has awarded a $4.7 million grant to the Blandin Foundation and 19 partners in the Minnesota Intelligent Communities coalition to enhance broadband access in rural Minnesota communities.

The grant comes from the Broadband Technology Opportunities Program, which is part of the American Recovery and Reinvestment Act. The program is administered through the National Telecommunications and Information Administration.

The Minnesota Intelligent Rural Communities coalition will use the funding to extend small business technical assistance and training, expand hours for access to workforce centers, distribute refurbished computers, train individuals and business, create courses for knowledge workers, and bring to Minnesota an online network of care for mental health workers. Projects will target rural Minnesota residents and communities, especially those unemployed and seeking employment, small businesses, coalitions of government entities and local leaders.

The Blandin Foundation, a Grand Rapids grant-making organization whose mission is to strengthen rural Minnesota communities, will administer the grant on behalf of coalition partners.

The total cost of the coalition’s proposed projects is estimated at more than $6 million faxless cash advances. Minnesota Intelligent Rural Communities coalition members will contribute $1.3 million in resources as match toward the effort.

Eleven demonstration communities throughout rural Minnesota also will receive up to $100,000 each to develop and demonstrate broadband projects through the grant. Those communities include Benton County, Cook County, Grand Rapids/Itasca County, Leech Lake Band of Ojibwe, Stevens County, Upper Minnesota Valley region, Thief River Falls, Willmar/Kandiyohi County, Winona, Windom and Worthington.

Blandin Foundation submitted in August 2009 the application for federal broadband stimulus funding on behalf of University of Minnesota Extension Center for Community Vitality, Minnesota State Colleges and Universities, University of Minnesota Crookston, Association of Minnesota Counties and their national counterpart, Network of Care Mental Health, Intelligent Community Forum, Minnesota Renewable Energy Marketplace, Minnesota Department of Economic Development Workforce Centers, PCs for People and Minnesota’s nine Regional Development Commissions.

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As the economy recovers, energy prices are rising and that is placing extra strain on families’ budgets.

Each spring brings a familiar ritual in gasoline markets, rising prices, and this year won’t be an exception. But motorists aren’t likely to pay much more than $3 a gallon, on average, during the peak summer driving season.

Lingering effects of the recession, such as high unemployment, reduced shipping and limited business travel, are keeping a lid on energy demand in the U.S. And global oil supplies are on the rise. For now, these trends are providing energy markets with enough of a cushion to prevent geopolitical tensions from causing severe price volatility.

On Tuesday, the Energy Department’s statistical arm predicted that oil prices would average $80 a barrel this spring, and rise to about $82 a barrel by the end of the year, influenced by robust growth in China. This is consistent with the agency’s past four monthly outlooks. Last year, oil prices averaged about $62, trading in a range between $33.98 and $82.66.

The average nationwide price for regular gasoline was $2.76 a gallon on Tuesday. Because of the anticipated bump in crude prices, the government estimates that gasoline prices will average $2.84 a gallon this year, up from $2.34 in 2009. It’s enough for families to take notice, economists say.

Gasoline accounts for about 4 percent of a typical family’s budget free credit report and score. But consumers tend to pay the increase at the pump instead of driving less. That leaves less to spend on clothing and other discretionary purchases.

Sung Won Sohn, an economics professor at the Smith School of Business at California State University, lowered his forecast for U.S. economic growth to 3 percent, from 3.2 percent, because of the anticipated rise in energy costs.

"Higher gasoline prices are like a tax that depresses overall consumer spending," he said.

The more gradual the pump-price increase the more manageable it is for family budgets, retail consultant Howard Davidowitz said. Given time to adjust, people "can decide what to do," Davidowitz said.

Or maybe people will remain tentative about getting behind the wheel more than is necessary.

Americans used 377.5 million gallons of gas per day in 2009, according to Oil Price Information Service, down from 378 million gallons in 2008. Tom Kloza, publisher and chief analyst, expects demand to rise by a fraction of 1 percent this year.

There are other factors keeping Americans off the road beyond high gas prices. Chief among them: lack of job security. Unemployment is 9.7 percent in the U.S., meaning fewer people commuting to work or driving on vacation.

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Sales at U.S. retailers probably declined in February as blizzards kept Americans away from malls and auto-dealer showrooms, economists said before a government report this week.

Purchases dropped 0.2 percent after a 0.5 percent gain the prior month, according to the median estimate of 56 economists surveyed by Bloomberg News before Commerce Department figures on March 12. Other reports may show the trade gap widened in January and consumers grew more confident this month.

Figures last week showing the U.S. lost fewer jobs in February than anticipated, overcoming the effects of the snowstorms that caused some companies to temporarily close, signals employment is on the verge of accelerating. More hiring and wage increases will be critical in lifting consumer spending, the biggest part of the economy.

“Retail sales likely would have squeaked out a modest gain if not for the severe snowstorms,” said Ryan Sweet, a senior economist at Moody’s Economy.com in West Chester, Pennsylvania. Nonetheless, “consumers will have to spend more freely for the recovery to sustain itself.”

A Labor Department report March 5 showed the economy lost 36,000 jobs in February and the unemployment rate held at 9.7 percent for a second month, indicating the labor market is stabilizing.

President Barack Obama, speaking at a Washington-area energy company, said the job report was “actually better than expected.” Even so, he said the number of unemployed is “more than we should tolerate” and urged Congress to pass a jobs bill to help lower unemployment.

Auto Sales

Auto sales fell last month to an annual pace of 10.4 million vehicles from 10.8 million in January, according to industry data last week. Toyota Motor Corp. sales fell 8.7 percent from a year earlier as it struggled with global recalls that halted demand for some models. Ford Motor Co., overcoming the snowstorms that curbed showroom traffic, beat General Motors Co. in monthly sales for the first time since 1998.

Excluding automobiles, retail sales were probably little changed after a 0.6 percent gain the prior month, according to the Bloomberg survey.

Chain stores turned in a better-than-forecast performance last month, compared with a low point last year, industry figures showed last week. Macy’s Inc., Abercrombie & Fitch Co. and Gap Inc. beat analysts’ estimates in February as holiday sales and spring collections tempted consumers to go shopping in a month of record snowfalls.

Same-Store Sales

February comparable-store sales climbed 4.1 percent, topping the Retail Metrics 3 percent estimate. It was the sixth straight monthly gain and the biggest in 27 months. Purchases fell 4.1 percent in February 2009, Ken Perkins, president of Swampscott, Massachusetts-based Retail Metrics, said last week.

TJX Corporation Inc., an off-price apparel chain, reported a 16 percent sales increase in the four weeks ended Feb. 27 from a year earlier.

“We achieved these sales despite the harsh snowstorms that affected many regions in the country,” said Sherry Lang, investor vice president, in a teleconference on March 4. “The month ended on a stronger note than we had anticipated.”

Households are feeling less pessimistic. The Reuters/University of Michigan preliminary index of consumer sentiment for March probably rose to 73.8 from 73.6 a month earlier, according to the Bloomberg survey before the March 12 release.

Fewer Claims

In a sign that job losses are abating, a report from the Labor Department on March 11 may show initial jobless claims fell to 460,000 last week from 469,000 the previous week, according to economists surveyed.

Stocks have recovered from a January slump prompted by concerns of a possible Greek default and government plans to boost oversight over banks. The Standard & Poor’s 500 Index has gained 6 percent since the end of January.

The economy grew at a 5.9 percent annual pace in the fourth quarter, the strongest showing in more than six years as companies tried to stabilize inventories, the government reported last month. Economists surveyed by Bloomberg early last month forecast growth will slow to 3 percent in this quarter.

A Commerce Department report on March 12 may show business inventories rose 0.2 percent in January after dropping 0.2 percent the prior month, according to economists surveyed.

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Tyson Foods and the League of United Latin American Citizens are donating 15 tons of meat and other protein-rich food to Second Harvest Food Bank of Central Florida.

The more than 30,000 pounds of meat donated Feb. 12 will be distributed to partner agencies in six counties and are part of Tyson’s and LULAC’s three-year commitment to fight hunger.

The new donation brings Tyson’s total in-kind donations since 2000 to more than 71 million pounds.

“Donations of poultry and other high protein foods are especially valuable as they allow us to provide our member agencies with more healthy, nutritious options,” said Dave Krepcho, president and CEO of Second Harvest Food Bank of Central Florida. “Every year, our agencies are seeing an increase in need. This significant donation will help local agencies feed our many hungry neighbors.”

S 2010 study on hunger in Central Florida showed there was a 152 percent increase in people receiving food assistance since 2006. Approximately 54,000 Central Floridians are in need of food assistance each week business card.

Second Harvest Food Bank of Central Florida is a member of Feeding America, which is the largest charitable domestic hunger-relief organization in the U.S. It serves about 500 agencies that feed the hungry throughout Central Florida, providing enough food for 14 million meals annually.

The League of United Latin American Citizens has approximately 115,000 members throughout the United States and Puerto Rico. It is the largest and oldest Hispanic organization, advocating for Latino civil rights, in the United States.

Tyson Foods Inc. (NYSE: TSN), based in Springdale, Ark., is one of the world’s largest processors and marketers of chicken, beef and pork, the second-largest food production company in the Fortune 500 and a member of the S&P 500. It provides products and services to customers throughout the United States and more than 90 countries with approximately 117,000 employees at more than 400 facilities and offices worldwide.

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"Avatar" kept its stranglehold on the top spot in the domestic box office as it passed the $2 billion mark in worldwide gross, according to Box Office Mojo, a Web site that tracks box-office revenues.

The movie also continued to close in on one of the few box-office records it has not yet attained — all-time biggest domestic gross, which is still held by "Titanic."

During the weekend, the top five grossing movies, along with their studio estimates, were:

• "Avatar" from 20th Century Fox — $30 million
• "Edge of Darkness" from Warner Bros. — $17.12 million
• "When in Rome" from Disney — $12.065 million
• "The Tooth Fairy" from 20th Century Fox — $10 million
• "The Book of Eli" from Warner Bros. — $8.77 million

The weekend marked the seventh-straight weekend that "Avatar" was number one at the box office.

Of the top five, "Edge of Darkness" and "When in Rome" were in their first weekends in theaters. According to a report from Box Office Mojo, "Edge of Darkness" was shown on about 3,600 screens at 3,066 site, and "When in Rome" was shown on about 2,600 screens at 2,456 sites.

On the all-time domestic gross list, "Avatar" has pulled in $594,472,000, second to "Titanic's" $600,788,188, which "Avatar" should pass this weekend.

"Avatar" also climbed the list of all-time domestic grosses, taking inflation into account. The movie was 26th on that list last week and 21st this week. To break into the top 20, "Avatar" will need to pass Disney's "Fantasia," which has an adjusted gross of $619,504,300.

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