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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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Hyundai Motor Co. announced Wednesday that it has set a goal to boost the fuel efficiency of its U.S. vehicle lineup to an average of 50 miles per gallon by 2025.

That target would put the the South Korean automaker more then 40% above the 35.5 miles per gallon level that U.S. government is pushing automakers to reach by 2016.

"Getting to 50 miles per gallon seems like a huge leap, but by making this commitment and aligning our research and development initiatives now, we know we can get there," said John Krafcik, Hyundai Motor America president and chief executive, in a statement.

Highway fuel efficiency for 2010 Hyundai models ranges from 36 miles per gallon in the subcompact Accent to 22 miles per gallon for the Veracruz, a sport-utility vehicle, according to the U.S. Department of Energy.

The 2011 Sonata, which went on sale earlier this year, achieves 35 miles per gallon on the highway.

The government says the leading fuel-efficient car for the year is the Toyota Prius, a hybrid that logs 48 miles per gallon on the highway. 

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Manhattan home prices held steady during the second quarter of 2010 but transactions were 81% higher than this time last year, according to several real estate market reports released Thursday.

There were more than 2,700 sales during the three months ended June 30, according to one report, which is average in a normal real estate market but up significantly from the 1,500 sales during the second quarter of 2009.

Manhattan is the nation’s most expensive large housing market. A two-bedroom, 1,250-square-foot condo apartment would cost about $400,000 in San Francisco, $250,000 in Los Angeles, $130,000 in Dallas and $100,000 in Miami. But in most of Manhattan, buyers are looking at $1.2 million or so.

That did not change much during the housing bust. The median home price in Manhattan fell about 20% from its peak, according to Greg Heym, a housing market economist who calculates market statistics for two of New York’s biggest brokers. And that is a lot less than bubble markets such as Miami, Phoenix and Las Vegas, where prices were slashed by half or more.

"And we’ve already gotten close to 10% of that back," Heym said.

Indeed, Heym’s latest Manhattan market report for brokers Brown Harris Stevens and Halstead reveals a continued pattern of a stabilizing Manhattan market. And surveys from the Corcoran Group and Prudential Douglas Elliman, two other premiere brokerages, concur.

"There’s no big news on prices," said Pam Liebman, Corcoran’s CEO. "The news is that there are a lot of buyers. We’re very happy seeing so much absorption [of inventory]."

The median sale price for a condominium or cooperative apartment in Manhattan was nearly $900,000, according to Prudential Douglas Elliman, more than the $843,000 calculated by Halstead and Brown Harris Stevens, and $810,000 posted by Corcoran.

These prices were either flat year-over-year (Corcoran) or up 7.6% (Prudential) or 6% (Brown and Halstead), compared with the second quarter of 2009. They were either down 1% (Corcoran) from the first quarter of 2010 or up 3.6% (Prudential) or 2.8% (Brown and Halstead).

The median price statistics may be a bit deceptive, according to Jonathan Miller, of the noted New York appraisal firm Miller Samuel, which calculates prices for Prudential guaranteed approval cash advance loans. He said the number of high-end apartments sold has grown disproportionately, which pulled up the median price.

"The market share for three-bedroom apartments, for example, increased to 18% from 12% a year earlier," said Miller.

The trend to more sales of larger apartments is evident in inventory statistics as well. The supply of big, luxury apartments fell 13% while inventory of the rest of the market rose slightly.

That happened even though lenders are not making it any easier for buyers of expensive homes to get loans. Miller said there has been no relaxing of strict underwriting standards in the jumbo loan market, mortgages for more than $729,750.

Consequently, many of the well-heeled luxury homebuyers are foregoing mortgages entirely. Liebman she said a large percentage of her agents report that at least half their buyers are paying all cash.

"It’s the highest amount of cash transactions I’ve ever seen," added Miller.

What has helped keep the local market strong has been a rebound in the financial services industry, the big town’s biggest economic driver.

"They’re hiring again on Wall Street," said Heym, "and overall unemployment has fallen every month this year."

Demand for housing figures to remain strong. The work force for all of New York City has swelled to more than 4 million for the first time, and many of those workers aspire to live in Manhattan.

And, with the precipitous drop in crime over the past 20 years, families have returned to the city with a vengeance: It seems nearly impossible at times to walk down any west side avenue without tripping over a stroller.

"In earlier recessions, what happened is that many people left the city," said Heym. "But the efforts to improve the quality of life here, better schools, less crime, have led people to stay." 

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Florissant Mayor Robert Lowery Sr. said the 2,000 permanent jobs and thousands more construction jobs tied to the proposed $350 million Riverview Casino in Spanish Lake are economic stimulus St. Louis County cannot afford to lose.

“With so many carpenters, ironworkers, pipefitters, sheet metal workers, electricians, plumbers and laborers out of work in this dire recession, the North County casino project would be a lifeline to thousands of North County families,” Lowery said in a statement this week. “The permanent jobs are also attractive with unemployment remaining so high in the region.”

Last week, St. Louis County Executive Charlie Dooley came out against the casino, citing environmental and flooding concerns, a move trumpeted by residents who had protested against the project.

Applications for the 13th and final Missouri casino license are due Sept. 1. The state’s last gaming license will become available in July when Las Vegas-based Pinnacle Entertainment (NYSE: PNK) closes the President Casino on the Mississippi River at the foot of Laclede’s Landing in downtown St. Louis.

“Whether you are for or against gambling, the fact is that it is legal in Missouri and there will be one more license issued,” Lowery said. “Rather than worrying about competition between casinos in the region, the region’s leaders should be concerned that these jobs will be lost to another part of the state. North County especially could use another economic engine. If we want housing values to remain high, then there have to be jobs to keep families here.”

The group backing the 377-acre casino complex is North County Development LLC, led by Wood River attorney Brad Lakin of LakinChapman LLC; his wife, Hallie Lakin; executive Kenneth Goldstein of Argo Products Co. in north St. Louis; and Wood River-based real estate investor Julie McDonald.

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Southwest Airlines is boosting the frequency of nine of its routes from Denver International Airport for the summer season as of Sunday.

The Dallas-based airline (NYSE: LUV) announced these DIA schedule additions:

• Denver-Baltimore, from three flights a day to four.

• Denver-New Orleans, from one flight to two.

• Denver-Oakland, Calif., from three flights to four.

• Denver-Portland, Ore., from two flights to three.

• Denver-Sacramento, Calif., from two flights to three.

• Denver-Seattle, from two flights to three.

• Denver-Spokane, Wash., from one flight to two.

• Denver-Tampa Bay, Fla., from one flight to two.

• Denver to Tulsa, Okla pay day loan lenders., from two flights to three.

After Sunday's schedule additions, Southwest said it will operate 129 daily flights out of DIA, and expects to have 144 daily nonstops to and from the Denver airport by August.

Southwest carried 16 percent of DIA passengers in the first two months of 2010, according to airport statistics, making it the airport's No. 3 carrier, after United Airlines and Frontier Airlines, by passenger volume. Its share of total passengers has grown rapidly since the airline arrived at DIA in 2006.

Click here to download a full list of Southwest's system-wide schedule changes.

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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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Bombardier Inc. reported Thursday that its net income for the fiscal year ending Jan. 31 was $707 million, down from $1 billion the previous year.

Revenues fell from $19.7 billion to $19.4 billion and earnings per share were down from 56 cents to 39 cent during that same time.

The company’s aerospace division, which includes Bombardier Learjet in Wichita, had revenues decline to $9.4 billion, down from the $10 billion it reported at the end of its last fiscal year.

The group reported 11 net orders in fiscal year 2010, compared to 367 in the previous fiscal year.

Despite the decline in income and revenue, Bombardier’s president and CEO, Pierre Beaudoin, felt the company performed well.

“Against a challenging economic backdrop, we delivered good financial results,” he said in a press release. “We took the downturn as an opportunity to fine-tune the way we operate in order to execute better and cut costs intelligently.”

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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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Snail mail might soon get even slower.

The cash-strapped U.S. Postal Service announced Tuesday that it will incur about $238 billion in losses in the next 10 years if Congress doesn’t permit it to revamp its outdated business model.

The agency is proposing an adjusted mail service schedule, which will likely cut Saturday delivery, and eliminating its prepaid retiree health benefits. That alone, it says, will cut $90 billion in costs over the next 10 years.

The challenges hurting USPS’s bottom line reflect a "macro change in society," Postmaster General Jack Potter said at a press conference Monday previewing the proposed changes. "All posts around the world are challenged, just as we are, by the diversion of hard copy to electronic medium."

USPS unveiled a list of cost cutting measures, including closing some branches and raising its prices, two moves which would both require Congressional approval. The agency also said that it expects to save another $123 billion between now and 2020 by renegotiating transportation contracts, cutting work hours, and expanding use of self-service kiosks in grocery stores and other popular retail spots — measures that don’t require Congressional approval.

USPS is trying to curb steep losses. It posted a $3.8 billion loss in its 2009 fiscal year, the latest in a multiyear string of whopping losses. Mail volume was down 12.7% for the year, a trend the agency expects to continue over the next decade as more consumers opt for online bill payments and message delivery.

The Post Office was $10 billion in debt as of Sept. 30 — not far off from its $15 billion debt limit, which the agency expects to hit in its 2011 fiscal year.

USPS spent $4.8 million on studies by outside consultants, Accenture, the Boston Consulting Group and McKinsey and Co. to forecast a 10-year outlook and present a plan that the agency calls both "ambitious and aggressive." Any changes to the government agency’s business model would have to be reviewed by the Postal Regulatory Commission, presented in a series of public hearings and approved by Congress.

The Post Office, an independent government agency, does not receive taxpayer dollars and is funded entirely by its own revenue. However, the Postal Reorganization Act of 1970 constrains the agency’s operations. It prohibits USPS from closing small branches based solely on economic factors, and prevents the agency from expanding its services beyond postal delivery free credit report online.

Post offices in some countries, including Italy and Japan, have boosted their sales by offering ancillary services, like banking. But unless Congress steps in, USPS cannot expand beyond the postal-mail realm.

Postmaster General Potter said relaxing some of the agency’s stringent regulations could allow it to tap into its strengths as one of the largest retail networks in America, as well as "The Most Trusted Government Agency" — a title USPS has won the last five years in a row.

With 32,000 post offices throughout the country, USPS has more retail locations than McDonald’s (MCD, Fortune 500), Starbucks (SBUX, Fortune 500), Wal-Mart (WMT, Fortune 500) and Walgreens (WAG, Fortune 500) combined, Thomas Dohrmann, partner at McKinsey & Company, said in the presentation Monday. That said, the average foot traffic for a post office is about one tenth of that at Walgreens — a mere 600 weekly customers.

USPS has already begun taking the axe to its budget. The agency made $6 billion in cuts last year, reducing its workforce by about 40,000 employees and chopping overtime hours, transportation costs and other expenses. Congress passed legislation allowing the organization to cut retiree health benefit payments by $4 billion.

Despite those measures, the agency still expects a net loss of $7.8 billion in fiscal 2010.

USPS employs about 600,000 workers and currently has a nationwide hiring freeze. Additionally, Chief Financial Officer Joseph Corbett says he expects to reduce its payrolls by the equivalent of 50,000 full-time employees in fiscal 2010 through natural attrition and by reducing overtime hours. The agency also wants to renegotiate its contracts with four unions in order to gain greater flexibility in scheduling part-time workers and moving employees across departments.

A significant postal price hike is also under consideration, although the price most consumers care about — the rate for a first-class stamp — is locked in at 44 cents for 2010.

"At the end of the day, I’m convinced that if we make the changes that are necessary, we can continue to provide universal service for America for decades to come," Potter said. "We can turn back from the red to the black, but there are some very significant changes that are going to have to be made." 

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Martek Biosciences Corp., fresh off its $200 million acquisition of Amerifit Brands Inc., is expanding its Columbia headquarters.

The company has leased an additional 22,000 square feet at the Columbia Business Center. Martek (NASDAQ: MATK), in taking the additional space, has also renewed its lease of 66,000 square feet at 6480 Dobbin Road.

The firm, which has other facilities in Colorado, Kentucky and South Carolina, was represented in its lease by Manekin LLC broker Adam Nachlas cash advance. Preston Partners brokers Danielle Schline and Athan Sunderland represented the landlord.

Lease terms were not disclosed.

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